Tapioca DAO Review – An Omnichain Money Market Allows Users to Increase Multi-Chain Exposure
Tapioca is a DAO that provides lending/borrowing protocols on. LayerZero. It allows users to take loans against many assets and can be settled to any chain. The vote-escrowed token veTAP allows holders to take part in governance and share in the fee revenues. Tapioca allows users to lend assets. The asset’s usage determines the elastic APY. Tapioca allows users to be exposed to multiple protocols and chains, creating additional yield streams. Today, let’s explore this protocol with Coincu.OverviewTapioca DAO will allow users to lend and borrow across 12+ EVM and non-EVM blockchains.Its core products are Singularity and Yield Box:Singularity is an independent risky lending marketplace (based on Sushiswap’s Kashi product).
Yield Box (BentoBox Version 2) is a token vault that is completely anonymous.
Tapioca will also provide the ability to mint “usd0”, a decentralized over-collateralized omnichain stablecoin.It will leverage LayerZero’s technology to achieve cross-chain composability without cross-chain bridges.Core ProductsSingularityLicensed from BoringCrypto to Tapioca, Singularity was created to provide composable lending markets across a variety of networks designed to solve fragmented liquidity problems.Singularity’s markets are siled, so riskier assets can be used as collateral with flexible rates to increase usage. If ETH borrowing has a low utilization rate, the interest rate will be lower until it reaches the optimal level. Leverage can also be used (up to 5x). Big Bang (usd0). Big Bang allows users to mint an Omnichain stablecoin called usd0. There is no borrowing limit, but there is a debt ceiling. The native Gas token (or its staked derivative) is the collateral accepted by the program for minting usd0. These include ETH and MATIC. Other collateral types will have a fixed rate of 0.5% and a debt ratio against ETH. If the AVAX debt ratio to ETH is 1 (assuming $100 million in Ethereum is issued), then the potential debt of AVAX could be as high as 50,000,000. AVAX’s interest rate will be determined by utilization and range between 0.5% to 3%. Governance can set every parameter of the Big Bang market’s interest rates. Tapioca also offers Hook Protected Mode. This feature doubles interest rates on at-risk collateral in certain markets every 72 hours up to a maximum 10% or until they expire. This feature is used to encourage borrowers repay their debts to reduce risk. Flash mints are also available for usd0 at a fee of 0.011%. Aave’s Flash Loans can be used in a similar way to this feature. This can increase market efficiency and arbitrage opportunities. Yield BoxYield Box can be used as a token vault where users can deposit tokens to earn yield. It can provide risk isolation strategies and support NFT and other tokens. It can automatically rebalance funds across multiple chains (such Aave lending on ETH mainnet, Arbiturm, or Optimism). The feature will initially only offer low-risk strategies. Tapioca will offer low-risk strategies initially.
11% allotted to investors
5% is allotted to the liquidity guide fund pool
2.5% for airdrops
DAO is allotted 66.5%
Tapioca’s DAO Shares Option Program. (oTAP). The DAO Shares Option Program works to encourage liquidity and sustainable growth. It works in the same way as an American call option (they call this ‘oTAP’). Users deposit liquidity into the lending marketplace and receive a receipt token called “tOLP.” They can then lock this receipt (representing their liquidity) for any period they choose. Tapioca’s average magnitude lock (more on this later) formula determines the discount factor that is applied to each receipt. This discount factor is valid for the entire period. Users then receive oTAP at a specific strike price. TAP can be purchased at this price by users, but they are not required to do so. The following formula determines the price: execution price = spot prices – X%, and X% = discount factors. The oTAP is valid one week and can be used at any time. Any unexercised oTAP will become worthless after expiration. Users are issued oTAP based on their market share, which can fluctuate between periods. The average magnitude locking formula, which ranges from 5-50%, determines the discount. This system is beneficial to both protocols and users. TAP can be purchased at a discount and sold for profit or locked into twTAP, which has other benefits. The protocol can sell DAO’s TAP off-market and receive the liquidity. It can also lock TAP into twTAP (which has other benefits). AML can be adjusted during periods of protocol decline (e.g. fewer users locking their TAP or providing liquidity to market), for example. Locking TAP allows for more discounts and more twTAP. The twAML mechanism determines how much twTAP users can get. It takes more TAP to unlock twTAP, or it will take longer to receive the same amount. usd0 supports composable across all blockchain composition without cross-chain bridges, slippage, or waiting time. It is only minted at Big Bang Markets and has liquidity managed in Uniswap V3. To encourage arbitrageurs to keep their prices pegged, Tapioca uses variable borrowing fees. If usd0 rises to $1.02, the borrowing fees are set at 0%. If it falls to $0.98, the fee is 1%. The target minting fee is 0.5% when usd0 equals $1.00 Below is the loan-to-value ratio for each type of collateral. They are 1:1-backed assets and can move freely on-chain via a burn-and-mint mechanism. You can wrap ETH on any one of these chains to earn tETH.
5 million TAP (5% supply) are tentatively scheduled to go on sale on 3/23/23. The initial starting price was $3.52. The final price was $0.88, which was 4 times lower. The final price will be determined by the open market and supply/demand. It is unlikely to trade below $0.88 and above $3.52. It will be used to provide liquidity and aid in price discovery.
TAP is sold to users by the DAO. The proceeds will be used for liquidity enhancement.
Borrowing Fee = 0.5%Interest = 0.5% (variable except ETH/USD0 markets)Liquidation = 10%Performance= 15%Flashmint= 0.001%Arrakis Vaault
Tapioca DAO uses Arrakis to manage protocol owned liquidity on Uniswap V3. 50% of the fees earned will go to the twTAP account. oTAP airdrop2.5million TAP supply (2.5%) will be airdropped as oTAP. 1.5 million will be given to participants in the liquidity bootstrapping pool. 1.5 million will be distributed to participants in the liquidity bootstrap pool. This means that users who buy 10,000 TAP in LBP will receive 3,000 OTAP as an airdrop. The exercise price is determined by the final LBP price. The discount factor level is 50%.
$3.51 – $3.00: 33%
$2.99 – $2.50: 25%
$2.50 – $2.00: 10%.
Any TAP purchased for less than $2.00 is not eligible for the oTAP airdrop.The remaining oTAP will be distributed to Discord members (OG and below) at various discounts, as well as Pearl Club NFT holders who are beta testers.ConclusionTapioca DAO is building one of the most interesting projects to date. An omnichain money market that can be used across multiple blockchains, without any slippage or risk of bridging assets. They have carefully selected token economics that will provide value for holders in a sustainable way. Although the scope of this project is vast, the team’s attention to detail leads me to believe that they have a good chance to succeed. We encourage you to do your own research before investing.Join us to keep track of news: https://linktr.ee/coincuWebsite: coincu.comHaroldCoincu NewsTags: LayerZerooTAPTAPTapiocaTapioca DAOtwAMLusd0Yield Box