taiKSM Triple Threat

Define DeFi

Published in

Taiga Protocol

5 min readMay 9, 2022

Achieve the highest yield on KSM in the entire Kusama ecosystem!

What is taiKSM Triple Threat?

A triple-threat in basketball is a posture where a player can do one of three things: dribble the ball, pass the ball, or shoot the ball. In other words, it is a highly effective technique used for creating scoring opportunities.

taiKSM is a synthetic asset providing users with triple threat versatility, specifically:

taiKSM aggregates 3 sources of sustainable yield
taiKSM offers 3 unique use cases servicing 3 groups of users: LPs, Holders and Traders

taiKSM is composed of KSM and LKSM, it is designed with the following goals:

1. Maximize Yield

As LPs, taiKSM aggregates multiple sources of highly sustainable yield:

Yield from underlying LKSM
Protocol fees via swap and redemption functions
TAI incentives

2. Enhanced Usability

As holders of taiKSM, you can enjoy different use cases with taiKSM such as:

Collateralize against taiKSM to borrow aUSD

3. Swap Efficiency

As traders, the underlying liquidity pool behind taiKSM serves as a highly efficient swap engine between KSM and LKSM

Traders can benefit from arbitrage opportunities while helping taiKSM maintain a stable peg against KSM

Optimal Strategy for KSM

taiKSM serves as an integral lego piece to the Karura ecosystem The following strategy aims to provide maximum yield on your KSM.

Step 1: Mint taiKSM with KSM or LKSM

Step 2: Collateralize taiKSM and borrow up to 70% in aUSD

Step 3: Deposit aUSD into 3pool

For instance, if a user deposits USD 100k worth of KSM to mint taiKSM, borrows USD 70k against taiKSM and deposits the full borrowed amount of aUSD into 3pool. The projected APR will be 38%.

How are taiKSM Yields Sustainable?

As of 5/5/2022*, the APR for taiKSM is approximately 46%. Below presents a breakdown of yield, the figures presented are based on historical data collected from the taiKSM pool.

Underlying LKSM Yield

As of 5/5/2022, 5,180 taiKSM are minted
taiKSM pool is composed of 67.8% LKSM, 32.2% KSM
This translates to 67.8% of the underlying yield of LKSM is collected and shared amongst taiKSM holders
The current yield on LKSM is 19.9%, therefore 67.8%*19.9% = 13.49%

Protocol Fees

Protocol fees are made up of swap (0.25%) and redemption (0.3%) transactions
Protocol Fees collected / TVL * 365
APR from protocol fees = 7.6%

TAI Incentives

On a per day basis, 4,000 TAI is allocated to the taiKSM pool as mining incentives (TVL < USD 1,000,000)
As of 5/5/2022, the exchange rate between taiKSM/TAI = 1 : 1,128
Therefore TAI APR = 4,000*365/(1,128*5,180) = 24.99%

Aggregating the yield from each source gives us: 13.49% + 7.6% + 24.99% = 46% APR

*TVL as of 5/5/2022 is 5,180 taiKSM ~ USD 660,000 (based on KSM reference price ~ USD 127)

How to Mint and Use taiKSM

Mint taiKSM

Select “Swap” from the navigation menu, then select the “Liquidity” tab and select “Add Liquidity”
Choose “LP KSM-LKSM POWERED BY TAIGA” as the pair token
Enter the amount of KSM and/or LKSM you wish to provide
(Single asset OR two-sided assets deposits are supported)
Click “Add Liquidity” and sign transaction

*You can open “Add all assets in a balanced proportion” option to provide KSM and LKSM proportionally

Stake taiKSM

Select “Earn” from the navigation menu, then select the “Collateral Staking” tab
Click “Stake/Unstake”
Enter the available amount of taiKSM you wish to stake below “Free balance” section
Click “Stake” and sign transaction

Unstake taiKSM

Select “Earn” from the navigation menu, then select the “Collateral Staking” tab
Click “Stake/Unstake”
Enter the available amount of taiKSM you wish to unstake
Click “Unstake” and sign transaction

Redeem Liquidity

Select “Swap” from the navigation menu, then select the “Liquidity” tab and select “Withdraw Liquidity”
Choose “LP KSM-LKSM POWERED BY TAIGA” as the “Withdraw Token”
Enter the amount you wish to withdraw
Click “Withdraw Liquidity” and sign transaction

*It will return a proportional amount with two tokens(KSM and LKSM) when you redeem taiKSM

Resources

What is Taiga Protocol

taiKSM Video Tutorial

Ambassador Program

Guides

About Tapio & Taiga

Tapio is a synthetic asset protocol enabling efficient liquidity for staking, crowdloan and uniform assets. It is designed to remove liquidity silos by synthesizing different formats of assets into a highly usable synthetic asset in the Polkadot ecosystem. Taiga is an experimental protocol on Kusama and the sister project of Tapio.

Tapio officially started in early 2021 when we received the Web3 Foundation Open Grant and the inaugural Acala Ecosystem Grant. Our team is composed of engineers, financiers, security experts and serial entrepreneurs based in Canada, China and the U.S.