New Project on #DotMarketCap: Tapio Protocol.

Tapio is a synthetic asset protocol that increases asset usability & reduces friction caused by liquidity fragmentation.

Project Introduction:

Tapio is a synthetic asset protocol enabling efficient liquidity for staking, crowdloan and uniform assets. It is designed to remove liquidity silos by synthesizing different formats of derivatives into a highly usable synthetic asset on Polkadot. Tapio synthetic asset can be used in a broad spectrum of use cases (ie. collateral, liquidity bootstrapping) while maintaining the benefits of the underlying asset (ie. staking yield, crowdloan rewards).

Project History:

With the rapid growth of decentralized financial primitives on Ethereum, we are witnessing an abundance of assets locked in DeFi protocols. Yet, majority of the locked assets suffer from low liquidity utilization, limiting the full potential of assets being put to use in a decentralized network.

This inspired us to focus on enabling liquidity efficiency. We began working on synthetic asset design in 2020, together with our growing understanding of the Polkadot ecosystem, we observed that siloed liquidity is a major bottleneck in scaling the Polkadot economy.

Our journey on Polkadot officially started when we received our first Web3 Foundation Open Grant. We are also the inaugural recipient for the Acala Ecosystem Grant.

Project Highlight:

Tapio provides several features to unify fragmented liquidity into highly efficient and usable synthetic assets:

Parachain Agnostic

Compatible with Substrate and EVM Parachains Application Agnostic

Integrate synthetic asset with any dApps Supports Uniform Assets

Stable Asset system supports any uniform asset pairs (ie. aUSD-USDC, DOT-LDOT, KSM-LKSM, etc.) Standardized Yield Handling

Transparent aggregation and distribution of yield from underlying interest bearing assets (ie. LDOT, LKSM)

By becoming the efficient liquidity standard for staking and crowdloan assets on Polkadot, Tapio can bring benefits to Holders, Liquidity Providers, Traders and Application Builders.

Holders

Tapio synthetic assets can increase the usability of uniform assets (ie. DOT, LDOT, lcDOT) by unlocking liquidity from crowdloan and staking use cases. Example: tDOT is a synthetic asset that can be synthesized from DOT-LDOT and DOT-lcDOT. tDOT holders can use it as collateral to mint aUSD while keeping the underlying rewards generated from the liquid crowdloan application.

Liquidity Providers

Further to earning trading fees passively, Liquidity Providers receive a highly stable peg and usable synthetic asset in return for providing liquidity. Example, holders of DOT and/or LDOT can contribute liquidity to the DOT-LDOT pool to receive tDOT. Liquidity Providers can use tDOT as collateral to mint aUSD or borrow other assets. The trading fees generated from the Stable Swap pools are collected externally so that LPs can put their synthetic assets to use without compromising trading fees.

Traders

Traders can swap uniform assets at high efficiency and low slippage via the Tapio protocol. When any underlying asset loses its peg, Traders can easily discover and capture arbitrage opportunities, which also helps maintain the value of the synthetic asset. Example: lcDOT is trading at an unusually large discount relative to DOT. Traders are motivated to arbitrage this opportunity, bringing the discount between lcDOT and DOT back to a normal range. During this process, the value of tDOT remains stable.

Application Builders

Application Builders can bootstrap liquidity by renting from the common synthetic pool (ie. tDOT). Example: A new project team is bootstrapping an ABC-DOT LP pool on Acala DEX. The project team can contribute single-side liquidity (ie. ABC token) to Tapio protocol in order to earn TAP tokens. The project team can stake TAP for voting rights to direct liquidity from the common synthetic pool to pair with the single-side liquidity to form ABC-tDOT LP pool. This is a cost effective way for any Project Teams with limited capital to bootstrap an LP pool with deep liquidity on a DEX.

TAPIO Token Use Case:

  1. TAP token holders are delegated with voting rights and the ability to propose governance actions

  2. TAP token is designed to capture a portion of the earnings of the Tapio protocol through buyback of TAP tokens on the open market using protocol earnings generated through swap and redemption functions. TAP purchased on the open market will be allocated to Community Treasury and redistributed to TAP stakers and synthetic asset users

  3. TAP will be used as a token incentive for Liquidity Providers and bootstrap usage for synthetic assets

  4. TAP holders can direct synthetic liquidity to the designated project liquidity pool via vote staking power. A portion of the trading fees generated from paired liquidity pool is distributed to TAP holders for directing liquidity

Team Members

Organized in 2018, NUTS Finance is a blockchain development DAO focused on building secure, composable and open source technology to enable financial applications on the blockchain.

Our core team is composed of engineers, financiers, security experts and serial entrepreneurs. Our approach is open, global and blockchain agnostic.

Through multiple projects, our aim is to deliver the working elements that can help shape the emerging crypto economy.

Read more at: https://bit.ly/3lkYvg5

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