Gyroscope, which stylises itself as the ‘All Weather Stablecoin’ has raised $4.5m in its seed funding round, which was co-led by Placeholder VC and Galaxy.
Other commitments came from Maven11, Archetype and Robot Ventures. Several angel investors also joined the round, including Cyrus Younessi, Fernando Martinelli, Hart Lambur and Will Villaneuva.
A live beta test of the GYD stablecoin mechanism, Gyro Proto, is now live on mainnet Polygon.
The company claims a fundamental problem with the crypto sector is that existing stablecoin designs are either “economically unsound, centralised, struggle with risk diversification, and/or overly rely on leverage mechanisms that are notorious for causing instability during harsh market conditions.”
To counter this, Gyroscope founders built the Gyroscope Protocol, a technology for a DeFi infrastructure with a novel all-weather design approach to solve the critical issues facing stablecoins including risk, adoption, and sustainability.
Gyroscope co-founder Lewis Gudgeon said, “At present, DeFi is missing a decentralised non-custodial stablecoin that effectively diversifies risk. Our aim is simple: to build a non-custodial stablecoin that actually works and isn’t algorithmic. It is designed to be fully backed.
“As opposed to custodial stablecoins such as USDC or USDT, Gyro Dollars are designed to offer a decentralised, non-custodial alternative with greater diversification in risk – if you care about the core value proposition of DeFi, you should want to use Gyro Dollars.
“At the same time, in contrast to algorithmic stablecoins which are undercollateralized by design, the Gyro Dollar is designed to be fully reserve backed. The Gyro Dollar provides a much needed new third path between centralised and algorithmic stablecoins.”
The Gyro Proto beta release showcases critical functionality of the stablecoin, including the diversified reserve, concentrated liquidity pools and new redundant oracle system. Gyro Proto will soon have a full release.
Early testers can join the community and offer feedback on the mechanism.
As for the Gyroscope Protocol, the company claims there are several key innovations. The first of these is its full reserve design. Its reserve aims to diversify existential risks in DeFi by requiring risks are ‘stratified’, or isolated from each other. It added that losses that accrue in one system should not spill into other connected sub-systems.
The protocol also has a new oracle system designed from first principles to greatly harden oracle security. Other features include centralised liquidity pools and decentralised governance.
In other stablecoin news, The BIS Innovation Hub recently unveiled its 2023 work program, which involves projects on areas such as CBDC, DeFi and stablecoins.
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