Introducing xTAROT: Unlocking the True Value of Community-Driven Governance
We present our unified vision for the xTAROT staking & governance program, as we move toward fully decentralized governance with Tarot DAO.
The flame of a single candle flickers gently as the ceremony begins. The time has come.
Staked TAROT (xTAROT) is the gateway for on-chain governance of the Tarot Protocol.
With xTAROT, stakeholders will govern and shape the future of Tarot. This includes the ongoing maintenance of key parameters, fees, and rates in the Tarot Protocol, as well as determining the distribution of fees accrued to the protocol’s own reserves.
Benefits of staking TAROT for xTAROT:
- Earn TAROT rewards from protocol revenue
- Enhanced yield by supplying staked TAROT in lending pools
- Increased liquidity across multiple lending pools
- Collateralization via the composable xTAROT token
- Participation in Tarot DAO governance
- Stake xTAROT in partner-incentivized pools for additional rewards
With the launch of xTAROT, ongoing fees accrued to the Tarot Protocol will be used to buy back and distribute TAROT rewards to xTAROT holders as follows:
- 50% → Remain in protocol reserves (as bTAROT and tTokens)
- 50% → Buy back and distribute TAROT to xTAROT holders
The fees accrued to the Tarot Protocol prior to the launch of xTAROT will remain in protocol reserves (as bTAROT) for future opportunities. The strategy for reserve management, as well as future adjustments to the distribution of ongoing fees, will be at the discretion of protocol governance.
Staking TAROT for xTAROT
Users can stake TAROT to receive xTAROT, which represents a share of the xTAROT staking pool. The xTAROT/TAROT exchange rate increases over time as staked TAROT is supplied to multiple lending pools, and further increases as protocol fees are used to buy back and distribute additional TAROT rewards to xTAROT holders.
Since xTAROT is like a receipt, you can later unstake xTAROT for your share of the underlying TAROT balance at the prevailing exchange rate. Rewards are distributed to the xTAROT staking pool over time, so the share of TAROT rewards will continue to increase simply by holding xTAROT.
Behind the scenes, the xTAROT staking pool works like a Tarot Supply Vault, but with no performance fee. Rather, a portion of the ongoing performance fees from Tarot Supply Vaults is used to buy back and distribute TAROT rewards to xTAROT holders.
Learn more about Supply Vaults here: Tarot Supply Vaults
Rewards for xTAROT come from ongoing fees accrued to the protocol reserves from borrowing activity and Supply Vaults. The processing of fees and distribution of TAROT to xTAROT holders is permissionless and can be invoked by anyone on a per-token basis. In return for invocation, the caller receives a reward bounty in TAROT (currently 0.1% of the processed amount).
In this way, xTAROT is linked directly to protocol activity and truly reflects the value of the Tarot Protocol and the thriving Tarot community.
xTAROT exists to enact protocol governance through Tarot DAO.
The core tenets of Tarot DAO are as follows:
- Self sustaining
- Community governed
- Governance minimized
- Modular and flexible
Tarot DAO will empower the Tarot community to propose ideas, provide input, and signal sentiment for various proposals, as well as unlock unprecedented capital efficiency with novel protocol treasury and reserve management strategies.
Governance channels will be added to the Tarot Discord to discuss ideas and proposals.
A Snapshot space at https://vote.tarot.to has been launched for Tarot’s decentralized governance.