Cyclos = (1) Uniswap v3 + (2) Serum + (3) Solana = (1) concentrated liquidity and a familiar UX + (2) efficient pricing / existing volume + (3) positive sum interactions.
Cyclos is a concentrated liquidity market maker protocol that aspires to be the primary liquidity source for Solana digital asset trading. Cyclos combines the exponentially higher efficiency of concentrated liquidity with the flexibility of Serum’s order books to drastically change the DeFi market-making environment on Solana.
Simply, Cyclos may be thought of as an overlay layer on top of Serum that brings the familiar continual product market-making (CPMM) AMM experience to the Solana DeFi ecosystem. Unlike previous methods, it does so while allowing for concentrated liquidity.
Another approach to comprehend Cyclos is to see it as the union of Uniswap v3 with the Solana-based Serum DEX. Cyclos’ value proposition is around positive-sum interactions, which is compatible with the general DeFi ethos of utilizing existing infrastructure and rearranging these building pieces in innovative, value-adding ways. There will be no recreating of the wheel, but rather a pie-expanding, positive-sum attitude.
Orders books instead of liquidity pools
Each swap operation comprises a busy/sell order and a settlement merged in a single transaction, allowing traders to compete against substantially deeper liquidity, quicker order flow, and limit orders rather than trading against scattered liquidity pools. Furthermore, Cyclos liquidity decreases the bid-ask spread on Serum, making Cyclos LP capital more competitive.
Lower initial capital
Reduced initial capital needed for establishing new tokens and bootstrapping liquidity pools. Cyclos eliminates the 50/50 ratio needed by competitor systems. Launching new assets on Solana has become considerably more affordable, letting more assets to thrive.
Gas fees do not penalize LPs for spreading their positions over many price periods or for initiating new ones often as price fluctuations occur. LPs may maximize the efficiency of their assets for little or no cost.
Automatic reinvestment of trading profits into orders
With the use of a crank, LP gains are automatically reinvested back into orders, increasing liquidity and compounding earnings.
- Launch of additional CYS token incentives: staking, fee rebates, buy and burns
- Beginning of liquidity mining
- V1 of dynamic repositioning: automated yield optimization for liquidity management
- Cyclos hackathon and incubator program
- Governance begins
- Expansion to other layer 1 protocols
CYS is the governance token for the Cyclos AMM Platform and accrues value via:
- A % of trading fee profits is used to initiate market buyback and burns
- Long-term holding incentives – holders who lock the token will receive % of trading fees
- LPs access a lower fee tier by staking token prior to providing liquidity
- Usage as liquidity incentives
6.2% – Seed Sale (10% on TGE, 10% every other month, after 5 months cliff)
4.2% Private Sale (12% on TGE, 11% every other month, after 3 months cliff)
1% – Public Sale (100% unlocked on TGE)
17% – Team (8 month cliff, 12.5% unlocked each quarter)
3% – Advisors (7% on TGE, 11.625% every 3 months, after 6 months cliff)
35% – Liquidity Rewards
5% – Marketing
3.6% – Serum Staking
5% – Initial Liquidity
20% – Ecosystem
Total Supply: 100,000,000 CYS
Initial Circulating Supply: 6.18%
Cyclos makes use of concentrated liquidity (similar to Uniswap v3), allowing users to specify a price range within which they are prepared to construct markets, reaping the same market-making returns with a fraction of the previously necessary cash.
By routing orders into Serum’s order books, Cyclos avoids the problem of bootstrapping liquidity. This gives Cyclos access to large volumes, ensuring competitive pricing and deep markets from the start. While Serum executes and matches transactions using order books, Cyclos may be utilized as an overlay service to provide the typical CPMM AMM experience.
Cyclos will play an important role in the nascent DeFi ecosystem, which will benefit from near-instant finality and cheap transaction costs.
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