Introduction

Tapir Protocol is a decentralized depeg protection marketplace that redefines risk management in decentralized finance (DeFi). Unlike traditional insurance models that lock capital in unproductive reserves, Tapir enables users to buy or sell protection against asset depegs while keeping their assets fully productive. By merging yield generation with customizable risk mitigation, Tapir empowers investors to optimize their strategies without sacrificing returns.

Tapir's Depeg Protection Marketplace

How It Works

Tapir's marketplace allows users to trade depeg risk through tokenized protection contracts. Here are the main parts:

  1. Token Splitting: Underlying assets are split into two components:

    • DP assets (Depeg Protected Asset): This asset protects its holders against it depeging (losing value, e.g. 1 DP_sUSDE < $1)

    • YB assets (Yield Boosted Asset): This asset amplifies returns by assuming additional depeg risk.

  2. Dynamic Trading: DP and YB tokens are traded on an integrated AMM, enabling real-time pricing of risk and yield.

  3. Capital Efficiency: All assets remain productive, generating yield even while used for protection.

Key Benefits

1. For Depeg Protection Buyers (DP Holders)

  • Hedge Risks Without Sacrificing Yield: Protect against depegs while maintaining your asset's yield potential.

  • Flexible Coverage: Customize your risk exposure by trading DP/YB tokens.

2. For Protection Sellers (YB Holders)

  • Earn Premiums: Profit from underwriting depeg risk by selling YB tokens.

  • Capital Productivity: YB tokens derive value from the underlying asset (e.g., sUSDe), avoiding idle collateral.

3. For the DeFi Ecosystem

  • Market for Risk: Creates a liquid market for pricing and transferring risk, addressing a critical gap in current DeFi.

  • No Dead Capital: Eliminates inefficient models where other protocols require locking stablecoins or ETH.

Why Tapir Stands Out

1. Decentralized Risk Pricing

  • AMM-driven markets let supply/demand dynamically set the cost of depeg protection, reflecting real-time risk sentiment.

2. Protecting High-Yield Assets

  • Specifically designed for high-yield protocols where the need & opportunity is the greatest

3. Transparent Resolution

  • Automated depeg checks at pool expiry use on-chain price oracles to determine payouts, ensuring fairness and trustlessness.

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