Introduction

A standard for tokenizing on-chain collateral

Tauri is a protocol for tokenizing on-chain assets, including contracts that otherwise impair access to utilized capital. Tokenized ownership of on-chain assets gives liquidity providers greater flexibility and uninterrupted access to their underlying collateral while enabling leveraged staking and bespoke risk management.

Peer to peer risk exchange

Existing decentralized earning platforms expose liquidity providers to complex code driven outcomes. Network participants must evaluate an array of catastrophic scenarios where the resulting state could wipe out their holdings or lead to significant impermanent loss. It is hard to anticipate the net effect of extreme market volatility or focused economic attacks. Tauri narrows the set of possible outcomes by giving liquidity providers dynamic exposure.

Dynamic exposure

The first application of Tauri gives liquidity providers the option to select customized risk and return profiles via the use of Tauri pool tranches. Tauri separately tokenizes the future earning stream and the net present value of utilized principal in each tranche. Earnings, based on tokenized holdings, are distributed accordingly across all tranches via payback waterfalls.

Payback waterfall

The initial application of the payback waterfall is split between two primary tranches.

  • A yield enhanced “A” tranche.

  • A risk mitigated super-senior “AA” tranche.

Added liquidity, when removed, is used to pay back the initial principal of AA holders before paying the principal and interest of the yield enhanced A tranche. In exchange for this enhanced return, participants of the A tranche must stake Tauri’s native tokens (TFI) to mitigate against failures on the underlying platform (such as Compound, Aave, or Curve). The Tauri protocol in this scenario acts as an escrow service for transfer of risk between A tranche participants and AA tranche participants.

Tauri also includes an “S” tranche for allocating liquidity efficiently as it is needed based on a tranche balancing algorithm.

Tranche selection

Launch

Tauri is a launching with a web3 application: tauri.finance. The Tauri smart contracts (pool, token, adapter, and strategy) are deployed in standby mode on the Ethereum mainnet and are set to go live on November 1st, 2020 at 2:00pm UTC. The first epoch begins exactly at that time.

Epochs

Epochs are 14 days in length. Over the duration of an epoch liquidity providers earn interest on underlying platforms and mine TFI tokens. While liquidity is locked in the pool LPs may trade their Tauri LP tokens representing proportional ownership of the pool. When an epoch ends liquidity providers are able to remove their liquidity alongside TFI mined and interest earned.

Upon launch all liquidity will be added into the S tranche to kick off liquidity mining. The AA and A tranches will be enabled in the second epoch.

Liquidity mining

Tauri is launching with DAI liquidity mining. All DAI added to the Tauri pool is deployed to Compound and earns interest. In future versions of the protocol additional currencies and platforms will be added dynamically.

TFI is mined using the dsec (dollars per second) equation:

dsec = dollar value * seconds

Liquidity providers mint dsec tokens representing the dollar value of capital they’ve added to the pool multiplied by the number of seconds until the end of the current epoch. TFI generated at the end of the epoch are redeemable in proportion to the total outstanding dsec tokens generated during that epoch. For example, if Alice owns 10% of outstanding dsec tokens then she receives 10% of the TFI subsidy. Interest earned is also distributed this way.

Tauri’s native ecosystem token: the Tauri Finance token (TFI)

TFI tokens, are the native currency of Tauri driving all of its features, products, and incentive structures.

Token Allocation

Total Supply: 40,000 TFI

  • Public sale : 10,000 TFI

  • Liquidity: 7,600 TFI

  • Team: 7,600 TFI

  • Advisors: 1,000 TFI

  • Reserves: 6,800 TFI

  • Ecosystem Rewards: 2,800 TFI

  • Marketing: 3,400 TFI

  • Community: 800 TFI

Smart contracts

The Tauri smart contracts have been deployed and their code has been verified on etherscan.

Tauri smart contracts have not yet been audited and users should exercise caution. Code audits and economic attack vector evaluation are included in the team’s ongoing development timeline.

The Tauri pool beta contract address is: 0x601a2f87a7e40f506d33fe817daa0aa4f6d18598

DAI interest, TFI mined, and principal tokens were all correctly distributed to LPs who successfully redeemed the correct amounts according to their beta dsec and principal token balances.

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