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How It Works?

Tapir uses a 3-step mechanism to create a two-sided protection marketplace:

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Step 1: Token Splitting

Deposit your yield-bearing asset (e.g., sUSDe) → Receive two tradeable tokens:

Token
What It Does
Who It's For

DP Token (Depeg Protected)

Protects you if the asset loses value

Risk-averse investors seeking safety

YB Token (Yield Boosted)

Amplifies your returns by taking on depeg risk

Yield-seekers willing to underwrite risk

Key Insight: Both tokens continue earning the base yield from the underlying asset (e.g., Ethena's USDe rewards). This is what makes Tapir unique.

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Step 2: Dynamic Risk Trading

  • Trade DP ↔ YB tokens on Tapir's integrated AMM (Automated Market Maker)

  • Real-time pricing based on supply & demand for protection

  • Adjust your risk/reward profile anytime before pool expiry

Example:

  • Want more protection? Buy DP tokens by selling YB tokens

  • Want higher yield? Buy YB tokens by selling DP tokens

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Step 3: Automated Settlement

At pool expiry, Tapir's oracle network checks if a depeg event occurred:

  • No Depeg: Both DP and YB holders redeem their tokens 1:1 for the underlying asset + accumulated yield

  • Depeg Detected: DP holders are made whole (100% redemption), while YB holders absorb the loss in exchange for the premium they earned

Protection Coverage: Up to 50% depeg events. Automatic, trustless, transparent.

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