Gyroscope’s GYD token, positioned to safeguard against stablecoin risks, debuted on the Ethereum mainnet following Polygon testing. Supported by venture capital firms Galaxy, Placeholder, and Maven 11, Gyroscope aims to offer a reliable alternative to conventional stablecoin models.
GYD Token Protective Function
GYD, termed an “all-weather” stablecoin by Gyroscope’s developer team, seeks to shield crypto investors from stablecoin failures. This solution aims to automate risk control, as highlighted in an email interview with CoinDesk.
Despite their name, stablecoins have a history of deviating from their pegged values. Examples like Circle’s USDC temporary depegging due to Silicon Valley Bank’s collapse and Terra’s UST collapse mark instances where large-cap fiat-backed stablecoins struggled to maintain their pegs. A Moody’s Analytics report noted over 600 instances of de-pegging among these stablecoins this year.
Gyroscope’s Solution
Gyroscope’s GYD offers a decentralized, non-custodial approach fully backed by reserves. Utilizing an algorithmic mechanism, it ensures a $1 peg while mitigating risk by segregating backing assets into distinct vaults.
Backing assets include stablecoins engaged in various strategies like yield-generating sDAI, USDC in Flux, and supporting AMM strategies such as LUSD and crvUSD. Gyroscope plans to expand reserve asset strategies as the stablecoin scales.
The protocol is tailored for decentralized finance (DeFi) users, featuring risk diversification rules, new oracle systems, circuit breakers, and optimized minting and redemption bonding curves for managing reserve assets and ensuring price stability.
Test Phase and Funding
Following Polygon testing and liquidity pool (E-CLP) introduction, attracting around $30 million in total value locked, Gyroscope successfully launched GYD on Ethereum.
The project raised $4.5 million in venture capital, led by Placeholder VC and Galaxy Ventures, with participation from Archetype, Maven 11, Robot Ventures, and Balancer Labs co-founder Fernando Martinelli.
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