Introduction
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Introduction
Gyro, A new crypto asset-class
In Crypto there are stablecoins, which are a digital currency that are pegged to “stable” reserve assets such as the U.S. dollar or gold. Given this value, these sets of coins have become the primary trading pairs in crypto markets and one of the most popular assets in DeFi. So much so that there are currently $111 billion USD worth of stablecoins in circulation. This is why you see retail and institutional investors use stablecoins such as USDT to hedge against Bitcoin.
But there is a better option, GYRO, which isn’t a stablecoin. It is a new and exciting crypto asset class that has advantages that stablecoins do not. It is a ‘Goldie Locks’ or Lego piece in the crypto ecosystem because it mitigates the risk profile between volatile assets such as bitcoin and pegged stablecoins. You see, functional stablecoins can achieve the stability and value of USD, but that does not necessarily mean they are stable in purchasing power and/or have the ability to grow in value.
For instance, if you introduce one asset with a risk profile (i.e., a volatile asset like bitcoin) into your portfolio, you would be adding systemic risk. If you add Gyro to your portfolio, it can be a tool to hedge high profile assets (i.e., BTC, ETH, BNB) like USDT. Gyro’s game changing difference is that it breaks away from having to be pegged by the USD.
You may be asking yourselves, “aren’t stablecoins already doing that?”
And the answer would be yes, but remember that most stablecoins are centralized and offer very little or no interest or rewards. Again, because GYRO is not a stablecoin and is not pegged to USD, it is safer than stablecoins. Gyro is seen as an even better option because:
· it earns interest
· is always backed by $1 USD (i.e. USDT, DAI, BUSD, USDC)
· is fully decentralized with community-driven governance
· offers competitive incentives to users.
How investing in GYRO works.
So, let’s break down the basics.
Each GYRO token is backed by 1 USD (i.e. USDT, DAI, BUSD, USDC) in the treasury.
We will initially start with USDT as our treasury asset. After launch, we will be adding other stablecoins to balance our treasury. This will include DAI, BUSD, USDC etc.
Tokens cannot be minted or burned by anyone except the protocol.
The protocol only mints or burns in response to price.
GYRO does not rebase. Instead, a new supply is created via direct sales into the market and burned via direct purchases from the market. This way, GYRO remains backed by real assets in the treasury, i.e., USD.
These basically translates to:
When GYRO trades below ↓ 1 USDT, the protocol buys it back and burns GYRO.
When GYRO trades above ↑ 1 USDT, the protocol mints and sells new GYRO.
This is because the treasury must hold 1 USDT and only 1 USDT for each GYRO every time it is bought or sold so it makes a profit. That means the protocol either gets more than 1 USDT for the sale side or spends less than 1 USDT on the purchase side.
The fact that the protocol holds USDT for each token allows us to say with certainty that GYRO will not trade below its intrinsic value in the long term.
Investments can then be made with defined risk because 1 USDT is the guaranteed long-term price floor. And because of this, the protocol can (and will) buy indefinitely below 1 USDT until no sellers remain, even if the supply is reduced to 0. In this example this event would reward those who did not sell immensely because they would end up with a chunk of every token that was burned!
Holding stablecoins to back tokens also creates a yield generation opportunity.
Locking away stablecoins in a vault would then be a waste. Given that the protocol never needs more than a few percent of reserves, even on the largest of down days, means you are free to utilize the rest to plug into yield aggregators and add those proceeds onto profits from buying and selling GYRO.
Gyro’s initial profit distribution
90% to stakers
10% to the decentralized autonomous organization or DAO (these allocations will be changed, if necessary, as decided by the DAO).
All rewards are paid in GYRO backed by stablecoins.
This system maintains a stable intrinsic value and reduces the incentive role of appreciation in favor of accumulation. As with real currency, you try to accumulate more dollars and you do not have to wish upon a star that your dollars become worth more. Although both can happen.
What is the best play with GYRO?
Buy GYRO as close to or just below 1 USDT as you can.
Remember the distance from 1 is the risk you take on (actually it is negative below 1!).
Regardless of where you buy you can then stake your GYRO or provide it to the PancakeSwap pool as liquidity and bond the LP token.
In both cases, you will earn more GYRO over time!
Conclusion
Gyro’s aim is to offer a new class asset token that can be a part of any portfolio. It can be used to hedge risky assets while offering safer and better incentives than stablecoins.
Last modified 1yr ago
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