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Tokens & stablecoins

ELI5: A token is a balance entry on a contract — like points in a game ledger. A stablecoin is a token designed to stay near $1. TARE is KhomDev's stablecoin, backed by locked collateral.

ERC-20 basics

Most fungible tokens follow ERC-20:

  • balanceOf(you) — how many you hold
  • transfer(to, amount) — send tokens
  • approve(spender, amount) — let another contract spend for you

When a vault or DEX moves tokens on your behalf, you usually approve first, then the protocol calls transferFrom.

How TARE stays near $1

TARE uses a CDP (collateralized debt position) model:

  1. You deposit collateral (e.g. WETH) into TareEngine.
  2. You mint TARE against it — at least 200% collateral ratio at launch params.
  3. Market forces + PegKeeper on Curve defend the $1 peg on secondary markets.

Analogy: a pawn shop with a health meter. You leave ETH on the shelf, borrow dollar tokens against it. If ETH price falls, the shop can sell your collateral to recover the loan.

flowchart TD
    Deposit[Deposit WETH] --> Engine[TareEngine]
    Engine --> Mint[Mint TARE]
    Mint --> Hold[Hold or spend TARE]
    Hold --> Repay[Repay TARE + fee]
    Repay --> Withdraw[Withdraw WETH]

sTARE — yield-bearing TARE

sTARE is an ERC-4626 vault: deposit TARE, receive shares. As protocol surplus grows, share price rises — you earn without rebasing the TARE token itself.

Flywheel connection

  • TARE is the hub asset — governance locks it, PegKeeper defends it, surplus feeds sTARE and Keep.
  • Coil fees partially convert to TARE surplus via routers.

See TARE hub and sTARE.

What can go wrong

Stablecoin risks

  • Depeg — TARE can trade below/above $1 on DEXs; PegKeeper and arbitrage help but do not guarantee peg.
  • Liquidation — collateral price drop → position closed.
  • Bad debt — if collateral cannot cover debt, surplus buffer and total_bad_debt accounting apply.