Gyro, A new crypto asset-class #
Cryptocurrency stablecoins are digital currencies pegged to “stable” reserve assets like the U.S. dollar or gold. As a result of their high value, these coins have become one of the most popular assets in DeFi and the primary trading pairs in crypto markets. Currently, stablecoins are worth $111 billion USD. Stablecoins such as USDT are used by retail and institutional investors to hedge against bitcoin.
The Game Changer #
GYRO, which is not a stablecoin, is a better option. The cryptocurrency asset class is new and exciting, with advantages that stablecoins do not have. Stablecoins are a ‘Goldilocks’ or Lego piece of the crypto ecosystem because they mitigate 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.
You would introduce systemic risk into your portfolio if you introduced an asset with a risk profile (e.g., Bitcoin). You can use Gyro to hedge high profile assets (i.e., BTC, ETH, BNB) like USDT if you add it to your portfolio. Gyro is different from the USD because it does not have to be pegged to it.
Perhaps you are wondering, “Do stablecoins already do this?” As for the answer, it would be yes, but keep in mind that most stablecoins are centralized and offer little or no interest or rewards. GYRO is safer than stablecoins since it is not a stablecoin and not pegged to USD. This makes Gyro even safer.
How investing in GYRO works. #
So, let’s break down the basics:
- The GYRO tokens have a treasury backing of 1 USD (USDT, DAI, BUSD, USDC). Treasury assets will be initially held in USDT.
- The balance of the treasury will be rebalanced after launch by adding other stablecoins. For example, DAI, BUSD, USDC, etc.
- Only the protocol can mint or burn tokens.
- Only when price changes does the protocol mint or burn.
Rebasing is not performed by GYRO. Direct sales into the market create a new supply, while direct purchases from the market burn it. As a result, GYRO is backed by real assets in the treasury, namely USD. In essence, this means:
- Whenever GYRO trades below ↓ 1 USDT, the protocol buys it back and burns GYRO.
- A protocol that mints and sells new GYRO when GYRO trades above * 1 USDT.
- Every time a GYRO is bought or sold, the Treasury must hold 1 USDT and only 1 USDT so it can make a profit. That means the protocol either gets more than 1 USDT from sales or spends less than 1 USDT on purchases.
- We can be certain that GYRO won’t trade below its intrinsic value since the protocol holds USDT for each token.
- With 1 USDT as the guaranteed long-term price floor, investors can make investments with defined risk. Thus, the protocol can (and will) buy indefinitely below 1 USDT until no sellers remain, even if the supply is reduced to 0. Those who didn’t sell would be rewarded immensely because they would end up with a chunk of every token that was burned.
Additionally, holding stablecoins to back tokens creates a yield generation opportunity. Stablecoins would then be a waste if they were locked away. Even on the worst down days, the protocol rarely requires more than a few percent of reserves for down days. This means you can plug the rest into yield aggregators and add the proceeds to profits from buying and selling GYROs.
In this system, the intrinsic value remains stable and the incentive role of appreciation is reduced in favor of accumulation. You don’t have to wish upon a star that your dollars become worth more, as you would with real currency. But both are possible.
Conclusión #
Gyro’s aim is to provide investors with a new asset class token that can be incorporated into any portfolio. By hedging risky assets, it offers safer and better incentives than stablecoins.
