What is Gyro? 🧬
A new, category-defining asset class allowing smart investors to build their wealth by hedging. It is a decentralized treasury-backed currency on BSC that maintains a value of at least 1$ USD. However, GYRO is not pegged to anything and therefore can have a value worth more than 1$ USD providing its holders with a potential for great upside.
Gyro is a decentralized reserve currency protocol with the aim of mitigating volatility of traditional cryptocurrencies while not being pegged to any fiat currencies.
Why does GYRO exist? 🔬
The world of cryptocurrencies is filled with speculation, market volatility and unpredictability. Investors are therefore exposed to extremes of skepticism (weak hands) and overestimation (diamond hands). Gyro is a new asset class that introduces the middle ground by allowing smart hands to hedge.
By having its own monetary policy and a cohort of new projects stabilizing the currency, it solves many of the problems inherent to fiat currencies that are flawed by their lack of underlying value, centralization & association with the interests of governments.
How does GYRO work? 🔮
It is a currency backed by multi-asset stablecoins. It is a currency of which the treasury and reserve are protocol controlled. It is a currency driven by a community-governed protocol.
At a high level, Gyro consists of its protocol managed treasury, protocol owned liquidity, bond mechanism, and high staking rewards that are designed to control supply expansion.
Bond generates profit for the protocol, and the treasury uses the profit to mint GYRO and distribute them to stakers. With LP bond, the protocol is able to accumulate liquidity to ensure the system stability.
How does GYRO differ? 🌀
Gyro allows investors to make money during bear markets as it is always backed, fully decentralized, provides stable yields and facilitates transactions at an unprecedented pace. Gyro differs by being an interest earning, community driven token with extensive liquidity and competitive incentives.
Is GYRO a stablecoin?
No, GYRO is not a stable coin. Rather, GYRO aspires to become an algorithmic reserve currency backed by other decentralized assets. Similar to the idea of the gold standard, GYRO provides free-floating value its users can always fall back on, simply because of the fractional treasury reserves GYRO draws its intrinsic value from.
Is GYRO Pegged to the dollar? 💵
No. Each GYRO is backed by 1 USDT, not pegged to it. Because the treasury backs every GYRO with at least 1 USDT, the protocol would buy back and burn GYRO when it trades below 1 USDT. This has the effect of pushing GYRO price back up to 1 USDT. GYRO could always trade above 1 USDT because there is no upper limit imposed by the protocol. Think pegged == 1, while backed >= 1.
You might say that the GYRO floor price or intrinsic value is 1 USDT. We believe that the actual price will always be 1 USDT + premium, but in the end that is up to the market to decide.
Who controls the funds?
As the protocol controls the funds in its treasury, GYRO can only be minted or burned by the protocol. This also guarantees that the protocol can always back 1 GYRO with 1 USDT. You can easily define the risk of your investment because you can be confident that the protocol will indefinitely buy GYRO below 1 USDT with the treasury assets until no one is left to sell. You can't trust the FED but you can trust the code.
As the protocol accumulates more liquidity, more runway is guaranteed for the stakers. This means the stakers can be confident that the current staking APY can be sustained for a longer term because more funds are available in the treasury.
What is a rebase?
Rebase is a mechanism by which your staked GYRO (sGYRO) balance increases automatically. When new GYRO are minted by the protocol, a large portion of it goes to the stakers. Because stakers only see staked GYRO (sGYRO) balance instead of GYRO, the protocol utilizes the rebase mechanism to increase the staked GYRO (sGYRO) balance so that 1 staked GYRO (sGYRO) is always redeemable for 1 GYRO.
What is reward yield?
Reward yield is the percentage by which your staked GYRO (sGYRO) balance increases on the next epoch. It is also known as rebase rate.
What is APY?
APY stands for annual percentage yield. It measures the real rate of return on your principal by taking into account the effect of compounding interest. In the case of Gyro, your staked GYRO (sGYRO) represents your principal, and the compound interest is added periodically on every epoch, thanks to the rebase mechanism.
One interesting fact about APY is that your balance will grow not linearly but exponentially over time! Assuming a daily compound interest of 2%, if you start with a balance of 1 GYRO on day 1, after a year, your balance will grow to about 1377.
Why should I stake GYRO?
Your GYRO balance will grow exponentially over time thanks to the power of compounding. Let's say you buy a GYRO for $400 now and the market decides that in 1 year time, the intrinsic value of GYRO will be $2. Assuming a daily compound interest rate of 2%, your balance would grow to about 1377 GYROs by the end of the year, which is worth around $2754. That is a cool $2354 profit! By now, you should understand that you are paying a premium for GYRO now in exchange for a long-term benefit. Thus, you should have a long time horizon to allow your GYRO balance to grow exponentially and make this a worthwhile investment.
What will be GYRO's intrinsic value in the future?
There is no clear answer for this, but the intrinsic value can be determined by the treasury performance. For example, if the treasury could guarantee to back every GYRO with 100 USDT, the intrinsic value will be 100 USDT. It can also be decided by the DAO. For example, if the DAO decides to raise the price floor of GYRO, its intrinsic value will rise accordingly.
How does the protocol manage to maintain the high staking APY?
Let’s say the protocol targets an APY of 100,000%. This would translate to a rebase rate of about 0.6328%, or a daily growth of about 2%. If there are 100,000 of GYRO staked right now, the protocol would need to mint an additional 2000 GYRO to achieve this daily growth. This is achievable if the protocol can bring in at least 2000 USDT daily from bond sales. If the protocol fails to achieve this, the APY of 100,000% cannot be guaranteed.
Do I have to unstake and stake GYRO on every epoch to get my rebase rewards?
No. Once you have staked GYRO (sGYRO) with GYRO, your staked GYRO (sGYRO) balance will auto-compound on every epoch. That increase in balance represents your rebase rewards.