Terry Lam
December 16, 2022
Our team has been building DeFi protocols on Ethereum since early 2018 and have evaluated different non-EVM networks throughout our building journey. We are advocates of Polkadot’s shared security model, Substrate framework, appchain capability, and parachain slot auction mechanism. Despite the innovation, we anticipated a thriving Polkadot ecosystem would be challenged due to liquidity fragmentation caused by derivative tokens.
We can find derivative tokens proliferating on networks with prevalent DeFi use cases. Using Ethereum for example, there are numerous formats of ETH derived from lending, staking and yield aggregation applications (ie. aETH, cETH, stETH, rETH, etc.). We envisioned a magnified situation would occur on Polkadot given the two major use cases for DOT are staking and crowdloans.
Since the first parachain launched on Polkadot 9 months ago, we have witnessed an increasing number of parachains introducing their own staking and crowdloan DOT derivatives, as predicted. The vibrant selection enables increased utility and user friendliness. However, it also creates 2 major problems: (i) siloed liquidity on individual parachains and (ii) adoption challenges for each derivative format. Ultimately this leads to liquidity fragmentation which reduces overall capital efficiency for the entire ecosystem.
We built Tapio Protocol with one goal in mind, to make staking and crowdloan DOT derivatives more usable for all parachains and dApps on Polkadot. We accomplish this by unifying different formats of DOT derivatives into a single highly usable synthetic asset, tDOT.
tDOT is powered by the Stable Asset system, which is backed by a highly efficient stable swap liquidity pool composed of native DOT and DOT derivatives. tDOT is currently live on Acala where we launched first, and the asset demonstrates numerous sustainable benefits for parachains, dApp builders, DOT holders and traders.
Tapio Protocol introduces a unified liquidity standard for staking and crowdloan derivatives. It is designed with the intention of being truly complementary and composable with parachains. Our approach and solution will play an integral part to realizing a highly secured and frictionless multichain vision set out by Polkadot. You can start using tDOT today in the Acala App, or follow our guide for getting started.
To realize this vision, we are excited to announce that Tapio has raised $4M in seed round funding led by Polychain, Hypersphere and Arrington, along with Spartan, LongHash, 0xVentures, CMS, D1 Ventures, 11–11 DG Partners, Genblock, Valhalla, PAKA, Double Peak, Illusionist Group— and a number of incredible angel investors.
Special thanks to Acala for their trust and support of Tapio’s mission since Day 0!
Tapio is a synthetic asset protocol enabling efficient liquidity for staking and crowdloan derivatives. It is designed to remove liquidity silos by synthesizing different formats of derivatives into a highly usable synthetic asset on Polkadot.
Tapio officially began in early 2021 when we received our first Web3 Foundation Open Grant. We are also the inaugural recipient for the Acala Ecosystem Grant. Our team is composed of engineers, financiers, security experts and serial entrepreneurs.
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