Gyroscope (GYD)

"Gyroscope is a stablecoin design that, like a physical gyroscope, remains stable as the surrounding environment changes."

Basics

• Based in:
• Started in / Announced on:
• Testnet release:
• Mainnet release:

History

• During the chaos of the depegging of USDC in the weekend of 11-12 of March 2023, the website of Gyroscope claimed it was 0.95$, but Polygon LPs priced it on 1.02$.

Audits & Exploits

• Bug bounty program can be found [insert here].
• Audits can be read here (10-2023).

Governance

DAO

• From their docs (1-2023):

"A DAO-elected whitelist of oracle guardians can initiate safety mode for a defined period of time. The DAO is able to replace the list of guardians at any time. This mechanism is designed as an emergency response lever, which only has pause control, and is intended to be activated in the event of an oracle failure or if a smart contract bug is found."

• From their docs (3-2022):

"Optimistic Approval can help to align incentives among different types of parties: one who possesses governance powers (governors), and another (guardians) who has the power to optionally veto during a timelock period. Ordinarily, guardians do not need to be involved in day-to-day governance, but the veto gives them the ability to block malicious proposals that would deviate from the vision of the protocol. In the first application to Gyroscope, Optimistic Approval is designed to give protocol users a veto power to stop governance changes that they disagree with. In this case, protocol users fulfill the guardian role of stewarding the protocol vision (e.g., of maintaining stability). The mechanism introduces checks and balances on governors' power. Should governors try to deviate from the shared vision of the protocol, Gyro Dollar holders will be able to exercise optional veto powers during the time delay to stop it. Ordinarily, Gyro Dollar holders will not need to do anything if governance actions are sound. However, if governance actions are contentious, Gyro Dollar holders can exercise the veto to block the action."

Token

Other Details

• The GYRO ticker on BSC is not affiliated with gyro.finance.

Technology

• Whitepaper and docs can be found here (2020, outdated) and here.
• Code can be viewed [insert here].
• Intends to launch on Ethereum, is live on Polygon (25-2-2023).

Transaction Details

• Capacity (TPS):
• Latency:

How it works

• From Dose of DeFi (25-2-2023):

"It aims to limit reliance on single oracle feeds for prices by meta-aggregating and indexing them. It also introduces an updated version of Maker’s Peg Stability Module that would attempt to prevent the Gyroscope stablecoin (GYD) from getting co-opted by a centralized stablecoin in its search for peg stability (what happened to Maker)."

• From their docs (1-2023):

"The central piece is a fully-backed stablecoin with all-weather reserves and autonomous price bounding:

1. A fully backed stablecoin: the Gyroscope stablecoin aims at a long-term reserve ratio of 100%, where every unit of stablecoin is backed by 1 USD worth of collateral.
2. An all-weather reserve: the reserve is a basket of protocol-controlled assets that jointly collateralize the issued stablecoin. Initially most assets will be other stablecoins. The reserve aims to diversify all risks in DeFi to the greatest extent possible. It considers more than just price risk, but also censorship, regulatory, counterparty, oracle and governance risks.
3. Autonomous price bounding: Prices for minting and redeeming stablecoins are set autonomously to balance the goal of maintaining a tight peg with the goal of long-term viability of the project in the face of short-term crises.

Scenario A: the stablecoin is priced above par value:

If the price rises above the peg, more stablecoins can be minted and sold on the market, with the proceeds growing the reserve. This is effectively a closed arbitrage loop on the upside

Scenario B: the stablecoin is priced below par value:

Depending on the reserve value covering 100% of the stablecoin supply or not, this scenario plays out differently:

1. With healthy reserves the same arbitrage loop as on the upside exists. Stablecoins can be bought on the market and redeemed for $1 worth of reserve assets. This is the default case, as supported by the first line of defense, the all-weather reserve design, which makes the asset-backing as robust as possible.
2. If there is a large shock to the reserve, additional lines of defense exist, including autonomous price bounding. If stablecoin units become undercollateralized, the bonding curve of the redemption market provides decreasing redemption quotes as a circuit breaker to maintain a sustainable system. While the ability of stablecoin holders to exit is retained, Gyroscope, importantly, provides reasons to bet on the stablecoin returning to its target price, as the redemption price autonomously recovers back toward peg as outflows equilibrate back toward zero or the reserve recovers (e.g., through yield)."

Oracle Method

• From Dose of DeFi (25-2-2023):

"It aims to limit reliance on single oracle feeds for prices by meta-aggregating and indexing them."

• From their docs (1-2023):

"The Consolidated Price Feed consolidates data from four different types of sources which have varying trust assumptions:

1. Chainlink. The security model of Chainlink amounts to effectively a large but trusted multisig.
2. AMM TWAPs. These TWAPs do not require trust, as they exist on-chain and do not require a relay. However, they are manipulable and slow tracking estimates of price.
3. Exchange-signed prices. Since the signatures for these prices can be verified on-chain, the relay for these prices does not need to be trusted, though the data provider (i.e., the exchange) is a trusted counterparty.
4. Observing changes to protocol state. The information about how agents interact with the protocol is observable completely on-chain with no trust assumptions. Unusual behavior can be used to flag suspicious settings when oracle prices may be wrong.

The CPF also has a series of circuit breakers that are designed to protect the application protocol in case faulty oracle information makes it through the consolidation mechanism as well as providing protection against more general risks, such as mitigating the effects of smart contract bugs.

A DAO-elected whitelist of oracle guardians can initiate safety mode for a defined period of time. The DAO is able to replace the list of guardians at any time. This mechanism is designed as an emergency response lever, which only has pause control, and is intended to be activated in the event of an oracle failure or if a smart contract bug is found."

• From their docs (5-2022):

"Gyroscope uses a system of oracle guardrails to extend the scope of trust minimization and failure tolerance. These include fundamentally designed on-chain consistency checks and circuit breakers, as well as manipulation resistant methods for pricing LP and vault shares.

The following oracles are currently being used by Gyroscope:

1. Consolidated Price Feed (CPF)
2. Balancer Pool LP token (BPT)"

Their Other Projects

• From their docs (1-2023):

"Additional products arise from the Gyroscope design. For instance, a highly liquid DEX that can withstand asset failures arises naturally from the Gyroscope design. This design can be conceptualized as a network of secondary-market automated market makers, Reserve Pools and Outside Pools that will allow efficient routing of trades. GYD Trading Pools are redundant, highly-liquid paths in and out of the Gyroscope stablecoin, while the Dynamic Stability Mechanism (DSM) is the mint/ redeem market."

Roadmap

• Can be found here (11-3-2023).

Competition

• They write at length on their USP here (1-2023).

Team, Funding and Partners

Team

• FTL Labs (1-2023)
• Full team can be found here.

Funding

"Supported by" (11-3-2023):

• Placeholder, Galaxy Digital, Maven 11, Robot Ventures, Archetype, Balancer and Aave.

(:

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