Deep Dive – GYRO
8 min read
Hey guys, I’ve been lurking around for quite some time now and this is my first time making a post here. I always enjoy when someone else makes a nice, detailed deep dive / summary of a project and always wanted to do one myself.
I’ve been actively looking into crypto and more specifically the De-Fi landscape for around 8 months now, as I am considering it a viable, long-term investment and want to gradually increase the exposure of my portfolio to De-Fi.
My overarching short to mid term goal is to really capitalizse on being early in the space (despite there being a lot of hype right now, I think we are still far away from wide scale adoption) and that is why I’m actively seeking projects and opportunities to invest in.
While I have been an avid investor into the more well-known and established projects such as Cardano, Solana and Terra (+ Anchor, Mirror), I think all of these are past their initial “baby” stages and are well on the main stage now. I was therefore looking for newer, less known projects and concepts which is when I came across Gyro.
Gyro ticked my criteria of being both a project in its infancy, as well as a novel concept in the world of crypto. So let me go ahead and explain:
WHAT IS GYRO?
Gyro is a decentralized currency that is not pegged (linked) to any fiat currency. The reason why it is not pegged (linked) to any fiat currency is that it aims to address the issues surrounding stablecoins.
Although stablecoins are often deemed and considered a “safe investment” by many, once their underlying concept is carefully examined you begin to understand that it’s not as safe as it may sound. Because of stablecoins being linked to USD (fiat currency), they may not turn out to be as “stable” as they sound. By being pegged to USD they are inherently linked to the value of the dollar, which is controlled by CENTRALIZED entities such as the Federal Reserve System or United States Government. While many may be comfortable accepting that, the sole reason I started investing and believing in crypto is decentralization – so I would be really going against myself, my belief and my vision of the future by holding stablecoins which somewhat resemble the “old” monetary system that I want to shift away from.
Gyro, on the other hand, provides a solution where the value of the token is not as volatile as Bitcoin or Ethereum and is considerably more “stable” while remaining decentralized and NOT directly linked to USD. This is also why they promote themselves as a “smart hedge”.
HOW DOES IT WORK?
Gyro ensures its functionality by being asset-backed, protocol-controlled and community governed.
It is asset backed by multi-asset stablecoins, which ensure that GYRO is always greater or equal to 1 USDT.
The treasury and reserve are managed by Gyro’s protocol which ensures that there is fairness and transparency at all times.
The protocol is open and driven by the community (hence DAO) where the holders of GYRO ultimately suggest, propose and implement changes to the project.
Fundamentally, Gyro consists of a treasury and liquidity that is managed and owned by the protocol itself. Gyro’s algorithm dynamically mints GYRO tokens based on a bond mechanism, and high staking rewards that are designed to control inflation and dilution.
The treasury issues Bonds which then generates profit for the protocol. This allows the treasury to use the profit to mint GYRO and distribute them to stakers. With LP bonds, the protocol is able to accumulate liquidity, ensuring system stability.
WHY GYRO
Besides the points I have already mentioned about stablecoins, there are a few more reasons behind why I am choosing to become involved with Gyro.
It allows me to avoid closely monitoring the crypto market, as I know that with the use of staking or bonding, I am in a position to realize profit regardless of whether it is a bull or bear market. Let me exemplify with staking. The price of the GYRO token itself may undoubtedly change, however, given the high APY returns for staking, I am not worried, knowing that the APY covers the losses I might be exposed to by price volatility(as the number of tokens I am holding is multiplying).
The token also allows me to curb inflation. Seeing the remarks of titans such as Michael Bury, inflation is something I am becoming increasingly worried about both in crypto and fiat. With Gyro, I am more comfortable having my funds there knowing that the protocol is designed in a way that aims to control and/or mitigate the problems of inflation.
GYRO is running on Binance Smart Chain. This is another reason why I am betting on Gyro. While I do invest in Ethereum and projects running on the ecosystem as well, I think that there is currently a lot of friction for new and upcoming projects and the gas fees can really impact the viability and long term sustainability of many projects and investments. That is why, I currently try to look for projects running on the Binance Smart Chain where the transaction speeds are much higher and the transaction costs and fees are minimal.
WHY I THINK IT’S THE FUTURE
I think unlike many of the projects being launched nowadays all having BABY, ELON, MUSK in its name that are just short-term pumps & dumps with no underlying value, this is one of the few projects under the radar that has an underlying added value, and aims to address a long-term problem in crypto that is meaningful to the community.
From the amount of time I have spent in crypto, I have seen that projects that are successful in bringing more novelty and decentralization to the space tend to succeed. I feel like Gyro embodies both of these aspects, which is why I am making my bet on Gyro too.
IT WORKED IN THE PAST
OlympusDAO is an example of a project that leveraged similar protocol mechanics and you can see and judge the results for yourself. They are currently floating around 330$ USDT per token. However, Olympus is not running on Binance Smart Chain and given the high transaction costs associated with being on Ethereum chain, I am convinced it will face problems in the long run. Ethereum gas fees are very high and it’s even worse if you use Uniswap or any other DEX because you are paying even higher fees for smart contract execution.
I also find the current price of OHM extremely high and would not feel comfortable entering at this price point. On the other hand, the current price of OHM is what makes Gyro a safer bet in my eyes, as it is a good indicator of the potential upside that there is.
WHERE IS THE OPPORTUNITY? HOW DO I MAKE $$$?
Now, to answer what most of you are probably curious about, I want to delve into how I plan to take action and capitalize on being early on the project. Please keep in mind that none of this is financial advice and you should all do your own research prior to investing.
1.IDO in a 4 days (28th of August)
Gyro is holding its IDO on the 28th of August. However, prior to its launch, they are hosting a “competition” in the form of a sweepstakes competition for whitelist allocation. Basically, you conduct a set of incentivized activities (e.g. following, retweeting) to increase the odds of you being chosen. They are then going to choose 500 people to be whitelisted and give them an opportunity to buy 1 GYRO token for $4 USDT. (Given Gyro’s functionality, we know that the closer we get to its intrinsic value of 1$, the higher the upside).
The IDO sale price is $4 USDT. These funds will be used to provide initial liquidity for the protocol. The sale will bring in $200k. $60,000 will be deposited to the treasury to back initial supply. The remaining $140,000 will be added as liquidity. The LP will open with 140,000 USDT and 10,000 GYRO. Therefore, the starting price will be $14 (on PancakeSwap) and the initial liquidity of $200,000.
So presuming you managed to be one of the 500 winners, you just made 3.5x return – presuming you sell at the listing price. Not too shabby.
1.Getting an entry point as close to 1$ as possible
Seeing and understanding how the protocol is designed; its reserves and treasury, it becomes visibly clear that the token will always be equal or greater than 1$ (as the protocol buys back GYRO to ensure that this is always the case). Therefore, the closer I am able to get it at the price of $1 the lower the risk and the higher the potential for upside. So, even if I am unable to win the whitelist allocation, getting in at $14 is still a pretty good entry point for me; knowing how high projects using such protocols can go.
2.Staking
Gyro’s protocol requires users to stake and bond in order for it to function as it should. Now, the less users that “stake” the greater the APY’s (returns), as the rewards are split among fewer individuals. Therefore, staking with GYRO prior to its wider adoption enables you to access, in my opinion, unparalleled yield, in the range of 1000-10k% APY at it’s launch.
As mentioned previously, staking allows me to compound and multiply the amount of tokens I hold and so even if the price of GYRO was to go down, the amount of tokens I am holding could effectively cover the losses, increasing the overall risk.
Now presuming the market is going up, I am also multiplying the amount of tokens I am holding. So not only do I get access to value appreciation of the token but I have also increased the overall holdings.
3.Bonding
This mechanism of Gyro allows you to potentially buy assets at a discount. Just like with normal bonds, the terms for a trade are defined and will take place at a later date. So for instance, presuming you buy bonds of GYRO for $14 per token at a maturity date of 5 days, and the price rises to $20 within 5 days, you managed to realise a pretty decent profit by obtaining the tokens at the price of $14, when their market price is already $20. However, unlike staking, this is a more active / risk-seeking strategy and might not be suitable for everyone.
4.Community competitions/giveaways
To incentivize and attract early users, Gyro is currently conducting a set of activities to reward community members for their engagement. From what I have seen, there are two places where activity is being rewarded right now – Twitter and Telegram. In both cases, Gyro rewards users in USDT for a set of activities that they do (e.g. liking, following, referring friends). I aim to win some of those to be able to take the money and put it into GYRO once it launches.
Overall, I think at this point there are a decent amount of ways for me to capitalize on being early on in the project, which goes directly in hand with what I wanted. So here it goes. This is my reasoning, thinking and course of action. Let me know what you guys think, I am open to any feedback/criticism and hope we can all learn from one another.
P.S.: Some of you have messaged me asking whether this revolves around a project called Gyroscope. That is not the case. This post is about GyroDAO.
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