DP
DP is the protection side of the Tapir split. Holding DP is equivalent to buying insurance against a depeg event — if the underlying asset loses its peg, your DP tokens increase in value, up to a maximum of 2x.
Key properties
Full name
Depeg Protection
Minted via
Splitting base asset (1 base = 0.5 DP + 0.5 YB)
Value range
100% (no depeg) to 200% (severe depeg, capped)
Tradeable
Yes, on the Tapir AMM during the Active stage
ERC-20
Yes, fully transferable
How DP gains value
DP tokens represent a claim on the base asset that scales inversely with the depeg size. When the asset depegs, value transfers from YB holders to DP holders.
The formula for DP's redemption value is:
Where principalDepeggedValue is the Closing Price expressed as a percentage of the HWM in basis points. For example, if the Closing Price is 80% of the HWM, then principalDepeggedValue = 8,000 bp.
In plain terms:
No depeg: DP redeems at 100% — you get back exactly what you put in.
Small depeg: DP increases proportionally. A 5% depeg gives DP a value of approximately 105.26%.
Large depeg: DP increases further. A 20% depeg gives DP a value of 125%.
Severe depeg (50%+): DP reaches its cap of 200%. This is the maximum payout.
Payoff curve
The DP payoff is asymmetric — you can gain up to 2x but never lose more than your initial position (in a no-depeg scenario, DP still redeems at 100%).
Worked examples
No depeg
You split 10 stETH into 5 DP + 5 YB. The pool resolves with no depeg detected.
DP
5 tokens
100%
5 stETH
YB
5 tokens
100%
5 stETH
Total
10 stETH
You receive exactly what you deposited (minus fees).
5% depeg
The asset's Closing Price is 95% of its HWM.
DP
5 tokens
105.26%
5.263 stETH
YB
5 tokens
94.74%
4.737 stETH
Total
10 stETH
Your DP position gained 0.263 stETH. The total is still conserved.
20% depeg
The asset's Closing Price is 80% of its HWM.
DP
5 tokens
125%
6.25 stETH
YB
5 tokens
75%
3.75 stETH
Total
10 stETH
Your DP position gained 1.25 stETH — a 25% return on the DP portion.
50% depeg (maximum payout)
The asset's Closing Price is 50% (or less) of its HWM.
DP
5 tokens
200%
10 stETH
YB
5 tokens
0%
0 stETH
Total
10 stETH
Your DP position doubled in value. YB is worthless. The 200% cap ensures the pool remains solvent.
Who holds DP?
DP is designed for participants who want protection against depeg risk:
Protocols holding large positions in pegged assets who want to hedge tail risk.
Treasuries seeking insurance on stablecoin or LST reserves.
Traders who believe a depeg event is likely and want leveraged upside (up to 2x) on that view.
Risk managers using DP as a structured product for portfolio hedging.
Trading DP on the AMM
During the Active stage, you can buy DP directly with the base asset through the Tapir AMM. The router handles the mechanics:
Your base asset is split into 0.5 DP + 0.5 YB.
The YB side is swapped for additional DP on the AMM.
You receive the combined DP amount.
Because DP typically trades at a premium (it costs more than 1 base per DP token), you receive fewer DP tokens than you would from a simple split. This premium reflects the market's implied probability and expected severity of a depeg event.
The implied APY shown in the UI represents the effective yield of holding DP, adjusted for the premium paid:
Since the exchange ratio is typically less than 1 for DP, the implied APY is lower than the base token's native yield.
Redemption
After pool resolution, you redeem DP tokens for the base asset at the resolved dpValue:
Redemption fees (and success fees, if applicable) are deducted from the final amount.
Last updated