Core Concepts
Tapio's asset protocol is built on several key technical foundations. Explore the following concepts to understand how the platform creates and manages Self-Pegging Assets.
Self-Pegging Assets (SPA)
Self-Pegging Assets (SPAs) are stable assets that automatically maintain their value relative to underlying assets while generating returns for holders. Users deposit correlated assets into pools and receive SPAs that use advanced mechanisms to stay stable and efficient.
Key Characteristics:
Self-stabilizing: Dynamic fees and protective mechanisms automatically maintain stable value during market volatility
Yield-generating: SPA balances automatically increase as the underlying pools earn fees and asset rewards through rebasing
Low-slippage trading: Enable efficient swaps between the underlying correlated assets
DeFi composable: Can be wrapped for compatibility with lending protocols and other DeFi applications
StableSwap AMM
StableSwap is a specialized trading algorithm designed for assets that maintain similar values, such as stablecoins or ETH and its liquid staking derivatives. Unlike traditional trading formulas designed for volatile assets, StableSwap uses mathematical curves that provide much lower slippage when assets trade near their expected relationships.
Tapio uses an enhanced version of the battle-tested StableSwap algorithm with Curve-NG features:
Proven Mathematics: Algorithms designed for stable and efficient trading between correlated assets
Dynamic Amplification: Adjustable curve parameters that optimize trading efficiency based on market conditions
Dual Fee System: Combines dynamic fees for pool imbalance with volatility fees for rate shock protection
Buffer Integration: Portion of collected fees goes into a protective reserve to help maintain pool stability
wSPA (Wrapped SPA)
wSPA tokens are wrapped versions of SPAs that follow the ERC4626 standard for seamless integration with DeFi protocols. While SPAs use rebasing to automatically increase token balances as yield is earned, wSPA tokens maintain fixed balances with growing underlying value.
Key Benefits:
Seamless integration: Works with lending protocols and DeFi applications that require non-rebasing tokens
Instant conversion: Wrap and unwrap between SPA and wSPA anytime
Same yield exposure: Both SPA and wSPA benefit from the same underlying pool performance
Stability Mechanisms
Tapio uses advanced fee adjustments and protective buffers to maintain SPA stability and protect holders. The system automatically applies higher fees when pools become imbalanced or when sudden rate changes occur, while a buffer system sets aside a portion of collected fees as a protective reserve for unexpected market conditions.
For detailed information on fee types, buffer mechanics, and calculations, see Fees & Protocol Mechanics.
Liquidity Operations
Adding/Removing Liquidity
Users can provide liquidity by depositing supported underlying assets. For example, in a WETH-wstETH pool, users can deposit WETH, wstETH, or both, which are then used to facilitate efficient swaps. In return, users receive SPA tokens representing their share and entitling them to rewards generated from trading fees.
The deposit process is seamless and liquidity providers can remove their liquidity at any time by redeeming SPA tokens for the underlying assets. The system ensures that withdrawals are as efficient as possible, minimizing slippage and maintaining price stability.
Swap
Tapio enables efficient swapping between correlated assets within each pool. The StableSwap algorithm provides minimal slippage and efficient pricing for trades between assets that maintain similar value relationships. Users can swap tokens directly within pools - for example, converting WETH to wstETH or vice versa - while benefiting from deep liquidity and low trading costs. The system's design particularly benefits traders looking to rebalance positions and arbitrageurs helping to maintain proper asset relationships without experiencing high price impact.
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