Decide on the length and size of the tassels. Consider the thickness of the cardboard, and make sure the top of the tassel will fit underneath the bottom edge.
Find something to wrap your yarn around. The tassels will generally be as long as the item used. (Books or DVD cases work great!)
Wrap the yarn at least 30 times (for medium thickness of yarn.) Cut the yarn, grab each side and carefully slide the loops off. Set it aside intact.
Cut another, separate piece of yarn about 6 inches long. Thread it into the loop bundle. Double knot it at the top to bind the yarn together in one spot.
Cut another, 6 inch piece of yarn. Lay it horizontally on the table. Place your loop bundle on top, with the bundle going vertical.
Tie a knot about an inch from the top of the bundle. Wrap the tails around it a few times before finishing with one last knot to secure it.
Get as close to the knot as possible then snip the tails off.
Snip the loops along the bottom to create the fringe. Trim the hanging pieces so they're relatively even.
Cut off the two remaining tails of yarn. Make enough tassels to completely line the bottom of the cardboard.
Attach the top of each tassel to the bottom edge of the cardboard using hot glue.