> For the complete documentation index, see [llms.txt](https://docs.tapir.money/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.tapir.money/readme.md).

# What is Tapir?

**Tapir is a depeg protection marketplace for decentralized finance.** It splits a yield-bearing asset into two tradeable positions: **DP (Depeg Protected)** and **YB (Yield Boosted)**. DP receives a larger share of the pool's collateral if its oracle records a qualifying depeg at resolution; YB absorbs that loss first. You can also provide liquidity to the DP/YB market.

Both tokens remain backed by the underlying asset, so its yield-bearing economics remain in the pool. Your net return depends on the price you pay, underlying performance, fees, and the eventual settlement.

{% hint style="info" %}
**Official launch: September 15, 2026.** [Zircuit USDC Vault 90D on Base](/live-markets/live-markets/zircuit-usdc-90d-base.md) is the only pool designated for funding and live operation at launch. Read the [Zircuit Finance USDC Vault Risk Analysis](/security/vault-risk-reports/zircuit-finance-usdc.md) for the underlying vault’s risks.
{% endhint %}

***

## The problem: depegs are DeFi’s quiet tax

Pegged assets can lose value even while a position continues earning yield. Tapir’s [Long-Term Depegs in Crypto Assets, 2020–2025](https://hackmd.io/@WsWACVT3QOy5_gRc2Z3ZGg/BkEPcKvy-e) research estimates **$1.1–3.3 billion** in market-relevant losses from non-algorithmic depegs over that period. The report treats algorithmic and governance-driven collapses separately, estimating **$42–54 billion**, and provides its event-by-event sources and methodology.

This historical research explains the problem Tapir addresses. Protection is built from the yield-bearing asset itself: YB holders accept first-loss exposure in exchange for a market-priced premium, while the deposited asset remains productive. The mechanism reallocates available collateral; it does not create an external reserve or guarantee recovery of inaccessible assets.

***

## Three ways to hold a position

| Side   | What you get                                                                 | Main trade-off                                                                                                             |
| ------ | ---------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------- |
| **DP** | Priority in the pool's collateral when the oracle records a qualifying depeg | A market-priced premium; protection is limited by settlement rules, available collateral, and the structural 50% depeg cap |
| **YB** | Underlying yield exposure plus the economics of selling protection           | First-loss exposure; YB redemption value can fall to zero                                                                  |
| **LP** | Swap fees while liquidity is active in range                                 | Exposure to the DP/YB inventory, changing prices, liquidity conditions, and losses borne by YB                             |

Trading depends on available liquidity and the AMM's pause state. A position's market price before resolution can differ from its eventual redemption value.

***

## How it works

Splitting **1 unit of the base asset** creates **0.5 DP + 0.5 YB**. DP and YB trade against each other on a Tapir-modified Uniswap V3 AMM. The quoted exchange rate reflects supply and demand for protection.

Each pool moves through **ACTIVE → COOLDOWN → RESOLUTION → REDEMPTIONS**. After the active period, the configured oracle submits reference and resolution prices. Once cooldown and price-age requirements are satisfied, anyone can call the pool's resolution function. Oracle data collection and submission require authorised operators; some oracle variants also support an admin-controlled manual backup.

If no depeg is recorded, each DP and YB redeems for one base-asset unit before fees. If a depeg is recorded, DP's rate increases up to two base-asset units per token and YB's rate decreases by the same amount. This can offset an oracle-measured price decline of up to 50% before fees; larger declines can leave DP holders with losses too.

The deeper material lives in [How It Works](/readme/how-it-works.md), [Tapir Mechanics](/protocol-mechanics/tapir-mechanics.md), and [Oracle Resolution](/protocol-mechanics/tapir-mechanics/oracle-resolution.md).

***

## What to check before using Tapir

* **The underlying and the market.** Review the asset, oracle configuration, maturity, liquidity, and controls for each market. Tapir adds contract and operational dependencies to those of the underlying position.
* **The audits and code.** Tapir Core V1 has reports from **Quantstamp and Hashlock**. See [Security and Audits](/security/security-and-audits.md) for scope, reports, and code verification. Audits do not eliminate risk.
* **The limits and timing.** Protection follows oracle inputs and the pool's formula. Settlement requires transactions and waiting periods; it is not an immediate payment when a price drops.

## Where to go next

* [How It Works](/readme/how-it-works.md) — the mechanism in three steps.
* [Live Markets](/live-markets/live-markets.md) — the official 90-day Zircuit pool, launching September 15.
* [Zircuit Finance USDC Vault Risk Analysis](/security/vault-risk-reports/zircuit-finance-usdc.md) — the full September 7 research report.
* [Using Tapir](/system-workflow/using-tapir.md) — strategies for buyers, yield-seekers, and LPs.
* [Markets](/system-workflow/markets.md) — reading the dashboard and navigating a market.
* [Incentives overview and points rules](/incentives.md) — how holding and liquidity rewards work, with visual examples.
* [FAQ](/resources/tapir-faq.md) — costs, protection limits, maturity, and access.
* [Tapir Core V1 source and technical documentation](https://github.com/tapir-protocol/public-tapir-core-v1) — contracts, lifecycle, access controls, and audit verification.