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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.
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.