Tarot

Lending

Tarot is a decentralized lending and leveraged yield farming protocol built on Fantom.

Risk Rating
Watch Out
Protocol Code Quality
Protocol Maturity
Protocol Design
Summary
What we like
Tarot is a decentralized lending protocol where users can participate as lenders or borrowers in isolated lending pools.
What we like less
The protocol uses Uniswap V2 time-weighted average price (TWAP) as its price oracle, which is more susceptible to manipulation.
What it means for you
Offers you a simple way to earn an additional yield on top of your LP tokens through leveraged yield farming.
Information
Exploit/Hacks
None
Info
  • Website
  • Token: TAROT
  • Tags: Lending
Key Metrics
  • TVL: $29.6M (Rank #113)
  • TVL Ranking by Lending: #23
  • Blockchain: Base, Optimism, Fantom, Arbitrum, Kava, Binance, Avalanche, zkSync Era, Canto, Ethereum, Polygon
  • Chain TVL
    • Base: $13.19M
    • Optimism: $9.78M
    • Fantom: $4.15M
    • Arbitrum: $2.41M
    • Kava: $20.59K
    • Others: $34.9K
Risk Assessment
Watch Out
Protocol Code Quality
  • Code reviewed by at least one experienced auditor; CertiK audited in August 2022
  • Anonymous team reduces transparency
  • No documented protocol hacks since launch
Protocol Maturity
  • Core protocol launched in 2021; maturity over one year minimizes technical risk as smart contracts are well battle-tested
  • Top 20% by total value locked slightly reduces risk
  • Core contracts can be upgraded with just an EOA wallet
  • No timelock exists or no information documented, which mean a malicious actor could approve upgrades without any delay
  • Low voting power concentration reduces risk
Protocol Design
  • No death spiral concerns
  • Poor mechanisms to mitigate oracle price manipulation
  • Isolated markets enable asset risks to be contained to each individual pool without impacting the entire protocol
  • Basic controls in place to prevent risky borrowing
  • Basic mechanisms in place to incentivize liquidations
  • Basic method to accrue protocol reserves
Things to know about Tarot

How Tarot works

Tarot is a decentralized lending protocol built on Fantom and Optimism. The smart contracts for lending pools are forked from Impermax. The core contracts consist of the Factory and Deployer contracts for each lending pool. Anyone can create a lending pool via the Factory, and all lending pools are isolated. This means that if a borrower gets liquidated in one pool, it does not impact any other lending pools. Each lending pool on Tarot has an associated decentralized exchange and token pair. All lending pools consist of three parts: an interest-bearing contract for the first token in the token pair (Borrowable0), an interest-bearing contract for the second token in the token pair (Borrowable1), and a collateral contract for the LP token (Collateral). Lenders can deposit either token0 or token1 into a Borrowable contract. In exchange, they receive interest-bearing bTAROT tokens, which represent the underlying token plus accrued interest. Borrowers deposit LP tokens as collateral into the Collateral contact to create loans, provided there is sufficient liquidity available. To enable leveraged yield farming, Tarot uses tokens from Borrowable0 and Borrowable1 to add liquidity to the decentralized exchange for the token pair. Borrowers receive cTAROT tokens in return that represent the borrower's initial collateral plus borrowed LP tokens. Lastly, Tarot Supply Vaults are lending aggregators that use automated strategies to earn yield across multiple Tarot lending pools. Users who deposit into Supply Vaults receive tTokens in return that represent a share of the underlying tokens in the vault.

How Tarot makes money

Tarot charges two types of fees paid by borrowers to lenders. There is a fixed, one-time borrow fee of 0.1% whenever a new loan is taken out. Currently, 10% of the borrow fee is reserved by Tarot and allocated to the protocol reserves as bTAROT tokens. In addition, there is interest on borrowed tokens that accrue over time. Lenders do not pay any fees for supplying tokens, nor any deposit or withdrawal fees. Lastly, Tarot charges a 10% performance fee on yield earned through its Supply Vaults. These fees are allocated to the protocol reserves as tTokens.

How you make money on Tarot

You can make money by depositing LP tokens on Tarot to earn leveraged yield farming rewards. Lenders can deposit assets to accrue borrowers' interest. Lastly, you can also deposit assets into Supply Vaults to earn lending interest across multiple Tarot pools.