EP 59: Another Stablecoin? | All-Weather Stablecoin Gyroscope
Stablecoin.
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Gyroscope Overview
Gyroscope is an all-weather stablecoin that is decentralised, scalable, and highly liquid, based on revolutionary new designs. It is not out yet, still in testnet phase. But we would like to share how the protocol works. It is reserve-based and the reserve ratio, in the long run, is supposed to be 100%. There are two tokens in the system, the $GYD and the governance token.
Three main highlights of GYD:
All-weather stablecoin
Dual AMM mechanism
Still in development
Mechanisms:
Reserve based: The reserve ratio, in the long run, is supposed to be 100%.
Algorithmic: It has a dual AMM model which is basically an AMM in the primary market and an AMM in the secondary market.
Dual-token system: There are two tokens in the system — the $GYD or gyro dollar itself, and the governance token which is used to set system parameters.
Peg
It is soft-pegged to US dollars. Instead of an external oracle, it uses a dual-AMM mechanism to maintain and balance its peg.
Collaterals
It is soft pegged to USD. It is algorithmic in the sense of the stablecoin creation, so it can fluctuate a little bit, but there is a hard stop in how far the prices can fall. This is a pretty good improvement compared to all the other stablecoins.
It is more than 100% collateralised and there are different kinds of stablecoins to mint the stablecoin. The collateral for each kind of stablecoin is different, based on how risky they are so that is something to take note of — not all collaterals are worth the same. Everything goes into one big vault and there are different c ratios for all of them.
Coordination among different decentralised participants
Economic agents
Gyro holders: People who are minting the $GYD. The general users would be the $GYD holders and they have a veto power to overwrite any governance that is not helpful to the system.
Governors: The governance role will then be the management of the funds or the management of the collateral. The way to make sure that they are incentivised to do the right thing is that the cash flow returns are delayed for a period of time so that you bind them to make sure that they continuously behave properly otherwise they do not get the returns.
Liquidity providers: The third type is yield farmers or liquidity providers. They help to utilize $GYD and help to maintain stability by doing arbitrage.
What Else Did You Miss?
PAMM Redemption Curve
What happens when the stablecoin falls below one dollar?
Minting $GYD
Does it need to be the same asset to open the vault?
Earning Yields
PAMM VS Redeeming Underlying Assets
Gyroscope VS $USDC
SAMM
Stability Mechanism
Lines of Defense
PAMM VS SAMM
Designing Governance
Governance Extractable Value
Conditional Cash Flow
Accruing Cashflow
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