Taco Market — a Tezos DeFi Proof of Concept

5 min readApr 6, 2021

Decentralized Finance (DeFi) has created a global, open alternative to the current financial system.

It started with Bitcoin…

Bitcoin was the worlds first DeFi application - allowing users to store, send, receive digital money without the need of a centralized 3rd party.

Continued with Ethereum…

Ethereum was the worlds first smart contract platform — making digital money programable. Over the past couple of years we’ve seen Ethereum take DeFi way farther than storing and sending value — allowing protocols to create decentralized savings, exchanges, yield aggregators, margin trading, insurance, lending, etc.

Finalized with Tezos…

If you’re reading this article, you probably have a general understanding of what makes Tezos great. Similar to Ethereum, Tezos is a smart contract platform that has very unique properties that make it the ideal smart contract platform to build DeFi in long term.

Self-amending ledger — members of the Tezos ecosystem can propose new technologies/changes to the Tezos protocol and the community votes on these proposals. This allows Tezos to continuously adapt new technologies as smart contracts evolve and avoids “forks” between development teams.
Liquid Proof of Stake — the Tezos blockchain works on a Proof of Stake consensus mechanism that allows scalable transactions and less reliance on electricity. (An issue Ethereum has been facing for some time now)
Robust technology — smart contracts are formally verified allowing devs to test code before launch.

While the potential of Tezos is tremendous, the network effect of Ethereum has allowed it to take a head start on many of these DeFi use cases.

For Defi to truly blossom on Tezos, critical milestones had to be accomplished.

Decentralized Exchanges: Dexter and Quipuswap

Wrapped Assets: wXTZ, wETh, wBTC (More to come from Bender Labs)

On-chain Price Oracle: Harbinger

Stablecoins: Stably USD $USDS, Kolibri $kUSD, USDTez $USDtz

These releases have set an important foundation for new DeFi projects to arise and has allowed us at Genius Contracts to continue the development of DeFi on Tezos.

NFT (0) — Tezos Taco

First Randomly Generated NFTs on Tezos

A non-fungible token (NFT) is a special type of cryptographic token which represents something unique; non-fungible tokens are thus not mutually interchangeable. This is in contrast to cryptocurrencies like Bitcoin and Tezos that are fungible in nature.These unique digital assets are being represented by audio, gifs, jpegs, or even your identity downloaded to the blockchain. The intrinsic value of these digital assets are decided by the free market.

As contributors to the Tezos ecosystem, we see a huge potential for NFTs. Low gas costs and flexible smart contracts create the perfect foundation to deploy NFT platforms and assets.

NFTs so far have little to no interaction with modern DeFi. We think this could quickly change as the ecosystem progresses and wanted to test a base layer NFT to be a component of our DeFi Proof of concept.

While most NFTs are designed/created individually, Tezos Tacos are randomly generated through hashing and a bit of shifting. Each Taco minted has its own unique properties.

The design for Tezos Tacos was created through Scalable Vector Graphics (SVG) which use dynamic CSS to display tacos in all different colors. Tzcolors was instrumental to this project and shows how these dApps will pave roads for a vibrant ecosystem to form on base layer protocols.

We then converted these image formats into the FA2 standard, a unified token contract interface, supporting both a wide range of token types (e.g. fungible, non-fungible, non-transferable, etc.) as well as multi-asset contracts (a la ERC-1155). FA2 aspires to offer wide expressivity to create novel implementations and even invent token types while maintaining a common interface standard for wallet integrators and external developers.

This project is a showcase of this new technology available in the Tezos ecosystem. (Read more)

With the base layer design built of FA2, a random function was created to generate 4 different types of Tacos.

Normal, Rare, Hidden, and Secret

The rarities of each one are yet to be discovered and change day by day, it’s hard to value each rarity yet as this taco market continues to develop.

The first Taco was minted for a price of 100 muTez or 0.0001 xtz. The current price is set at 0.7 xtz!

Tezos Tacos is another example of a platform built on the FA2 standard, like kalamint, quipuswap, opensea, and hic et nunc.

Utility Token (1) — Red Salsa $rSAL

Red Salsa is the first native utility token for the Taco Market. Users who had at least 1 taco on Taco Shop received 10,000 Red Salsa in an airdrop.

Additionally, SalsaMarket was added to Taco Shop where users can sell any taco for 1000 Red Salsa. We’ve hidden the high rarities so no mishaps happen with your rarest taco NFTs — This sets the fair market prize of 1 $rSAL to taco_price/1000.

A Quipuswap pool has been created, exchange rate was initially set to taco_price/1000.

$rSAL FA2 Contract: KT19ovJhcsUn4YU8Q5L3BGovKSixfbWcecEA

Token ID: 0

Governance Token (2) — Salsa DAO $sDAO

Salsa DAO is the governance token (FA2 token) of Taco Market with a supply cap of 50m coins. Early users are able to stake, farm, and swap their Red Salsa on SalsaDAO.

Tokenomics: This $sDAO farm accrues 5 tokens per second, split by the whole pool. Stake and unstake at anytime, this is a very simple pool with 15mil of the 50m $sDAO supply in the farm.

$sDAO FA2 Contract: KT19ovJhcsUn4YU8Q5L3BGovKSixfbWcecEA

Token ID: 1

Technology Roadmap

The DeFi dApp opportunities are endless — new ideas are spawning daily through research and base layer protocols will allow us to build on top of other projects code.

$sDAO will allow the community to contribute to the development of Taco Market (basing the amendment philosophy of the overarching Tezos Protocol). Our next projects will be larger undertakings - Options? Lending? Stay tuned.

We’re depending on the new indexer on our genius server to optimize the movement of all this taco data. Patchwork solution for indexing bigmap data is running smoothly. Optimized to only update cloud cache when blockchain data changes for minimum costs.

Community Airdrops — GC Trophies

Early users of Taco Shop were airdropped the first GC Trophies.

Early-Adopter Award: 0–50 tacos

Enthusiast Award: 50–150 tacos

Front-Runner Award: 150+ tacos

Trophies like these show community members interaction with Taco Market dapps, so you’ll get free/early access to new stuff and even more airdrops in the future.

Tezos Casino

We’ll be testing a Tezos Casino on the Florence testnet as the contract size will need the 32kb update. This will allow users to interact bet with our tokens in a decentralized casino.