The Make DeFi Great Again Campaign

Blueprint:

After the incredibly successful Genesis of the Tapioca ecosystem, starting with the self-hosted TAP LBP raising over $8 million dollars in POL (Protocol Owned Liquidity) from over a thousand participants to the first ever call option airdrop bringing in an additional $2 million dollars in POL and revolutionizing the approach to airdrops, to the TAP/WETH Uniswap V3 pair on Arbitrum bringing in over half a million dollars in yield to the DAO from swap fees on its POL based LP position in a month, the Tapioca protocol ecosystem was then deployed. While the protocol itself was functioning flawlessly without any security incident(s), a small issue arose from a parameter setting being incorrect in the twAML, or the “Time Weighted Average Magnitude Lock”, which is used to incentivize liquidity being time weighted or liquidity being locked for a period of time within the Tapioca ecosystem, which caused the Tapioca ecosystem’s incentive model to become economically disabled. Pearl Labs and other collaborators such as EnigmaDarkLabs began a war room to not only mitigate the issue, but examine twAML to analyze what needed to be improved based on the limited data created in production, create on-chain simulations to validate the problem in twAML V1 and the solution to this problem in twL (formerly known as twAML 1.1), validate the base mathematical theory and formula in twL, create parameter recommendations for twL, and create end-to-end btt tests + an invariant suite of the twAML codebase repository.

There also existed a subset of a few very minor issues, such as within the Guarded State in production (limited features functionalities for first 30 days for security purposes)- there was to be a single Singularity market, GMX V1 GLP. As GMX V1 (and GLP by extension) has been majority migrated to GMX V2, GLP yields are extremely low. Singularity’s first market will now instead be Stargate V2 USDC, which is a very attractive, secure, and sustainable initial Singularity market. Secondly, Tapioca’s interest rates were much too high for the market at 8% (equivalent to DAI), and will now be set competitively beneath GHO’s rates. Lastly, with only ETH, wstETH, and rETH collateral assets available to mint USDO, Big Bang will now also include ZRO, a gas token within the LayerZero messaging network, which has obvious alignment with Tapioca as a protocol.

While we could rush through and skip many of these steps to appease the ever present “wen”-oors, after spending 2.5 years and our blood sweat and tears making Tapioca a reality, and the constant reminder of CDP system exploits contrasted by the giants in the CDP vertical keeping the lion share of the market not from constant innovation but only through cementing deep trust in the security of their protocols, thus, undergoing this short time period to achieve perfection and have the full trust from every Tapiocan is of the utmost importance to us and the protocol, and is thus the best decision. In the long-term, this blueprint will have paved the way for Tapioca to scale for many years to come, and the following items are the remaining steps down this path:

1. Integration testing for twL (twAML V2) into Tapioca-Bar (Big Bang Singularity), Yieldbox, Tapioca-Z (Cross-Chain Locking), and Periph (TAP Token Oracle, Early Unlock Bot), Invariant Suite Rebase Rerun for twL, Final On-Chain Simulation

The first remaining task is for the completed twL (twAML V2) to be integration tested with contracts it interfaces with. Secondarily, the invariant suite will be re-ran by Enigma, and a final on-chain simulation will be completed validating twL logic. The simulation will be included on the Post Mortem.

2. Stargate V2 USDC Strategy Second Audit, Mitigation Review

The Stargate V2 USDC strategy, leverage executor, and oracle contracts will undergo a second audit by Windhustler , while in parallel being reviewed by Enigma specifically for it being a non-standard Singularity market featuring a 6 decimal token (Singularity was only tested with 18 decimal tokens).

3. ZRO Parameter Recommendations, twL Math Theory Testing, Post Mortem Release, Tapioca Documentation Update

As Tapioca will be the first CDP protocol to support ZRO as collateral, parameter recommendations will need to be done in order to protect USDO’s price parity to the U.S. Dollar. Ryad, a Math Ph.D will be reviewing the twL math theory for release on the Post Mortem. Once Ryad completes, the Post Mortem will be released. Lastly, the Tapioca Documentation will be updated, and 0xRaz will be completing Developer Documentation as well.

4. Migrate to Monorepo + Deployment script standardization with tests set-up in foundry + Automated Deployment

With 130+ contracts, 13,000 SLOC (Lines of Code), and 7 repos, it is nearly an impossible task to deploy the protocol, which is why it took a 72 hour marathon to deploy the protocol. Kartojal, our newest Solidity Engineer, luckily is the best of the best at deployment automation, being the founder of Catapulta , and thus he will be moving Tapioca’s 7 repo’s into a monorepo, and creating a one-click automated deployment system.

5. Front-end integrations with contracts for testnet

Finishing up tying in all of the refactored contracts + Stargate V2 USDC, accommodating the UI for the new logic (oTAP V2).

6. Testnet Deployment, Testnet Fixes based on Feedback, Testnet Airdrop

We will be deploying a full testnet for Tapiocans to use, which will also come with an airdrop of aoTAP (airdropped oTAP)! Based on your feedback, we’ll be adapting and fixing the UI/UX for perfection for the last step…

7.* Production Deployment*

With everything completed, we will have a single slick monorepo for the entire codebase, an automated deployment system, the new Stargate V2 USDC Singularity market strategy, ZRO onboarded, twL math theory fully validated, a twL full on-chain simulation, a perfect UI/UX, and every line of code tested top to bottom keeping our near $3 million dollar auditing spend crystallized.

This list will be updated regularly on progress, and our same constant communication will continue. This is the finalized plan that is already in motion, and we expect the testnet to be out in a short number of weeks, and the mainnet release to follow a similar timeframe thereafter.

The Airdrop:

There will now be an airdrop of aoTAP (airdropped call option TAP), which many Tapiocans already have experience with from Genesis. This is a thank you to all of you who continue to support Tapioca through thick thin, we wouldn’t be here without you.

To become eligible, you will need to interact with the testnet and provide quality feedback on it. The amount of aoTAP you will receive will be pro-rata based on your averaged TAP holdings on mainnet over multiple snapshots before, during, and after the testnet release.

The aoTAP discount will be 33%, and the total amount of aoTAP globally available will be based on the amount of TAP that the DAO has collected at the time of airdrop through TAP/ETH Uniswap V3 swap fees. You will need Native USDC (not USDC.e) on Arbitrum to exercise the aoTAP, and gas on the Arbitrum network. All major web3 wallets are supported.

Currently, there is 77,308 TAP collected in a month, which at current value is nearly a quarter million dollars in TAP, correlating to nearly $100,000 USD in potential profit from the in-the-money call options. These aoTAP call options will also carry a 7-day expiry as well.

Note From El Jefe:

I want to personally again thank each and every one of you for your support. While the twAML issue was very small, I have worked endlessly the last two + years to deliver for every one of you who believe in Tapioca, and now is the time to finish rectifying that small misstep and deliver once more. However, this is why this issue is being handled with such care, professionalism, and attention, and why I have taken feedback from many and remained steadfast in my conviction pressure or not to take the right amount of time and steps to ensure beyond a shadow of a doubt that V1.1 will be a massive success. I will never cut corners like many others do in my position where you as the community get left holding the bag, and I take the responsibility my position holds very seriously to ensure the long-term success and security of the Tapioca ecosystem, it is the only way Tapioca becomes what we all want it to be. In the interim, this unplanned aoTAP airdrop is the present you all deserve. We truly have the best community in the world with the outpouring of support I’ve seen in the last few weeks. I believe wholeheartedly that we have made a negative into a big positive through how much the Tapioca protocol has improved in every facet in this short time frame.

Together as Tapiocans, we embark on our campaign together to MAKE DEFI GREAT AGAIN!

TAPIOCA V1.1 2024