Gyroscope Rolls Out Yield-Bearing Version of Stablecoin Targeting Over 10% Yield

By admin On Aug 12, 2024

Decentralized finance (DeFi) protocol Gyroscope said Thursday it roll out a new yield-generating version of its stablecoin.

“Savings GYD,” or sGYD, will aim to pay out 12%-15% annualized yield to token holders, variable to market conditions,” the team said. “The revenue comes from the tokens backing assets that are placed in segregated vaults across various DeFi investment strategies.” The protocol “may be able to source” additional revenue from fees from its high-yield liquidity pools, launched earlier this year, the group added.

Gyroscope hopes to attract decentralized autonomous organizations (DAO) to allocate a part from their treasuries in sGYD to earn a yield.

The stablecoin launch coincided with the start of the next leg of the protocol’s points earning program SPIN. During “season 2,” users will be able to choose to earn native yields with baseline points or boost their rewards forgoing the yield.

Stablecoins – cryptocurrencies with a fixed price, predominantly tied to the U.S. dollar – are a key piece of infrastructure for trading and transactions on blockchains. The next generation of stablecoins that pays out on yield to its holders is getting increasingly popular.

Mountain Protocol’s USDM, for example, backs its price by holding U.S. Treasuries, but passes on the bond yields to token holders unlike stablecoin giant Tether’s USDT. Maker’s stablecoin shares protocol revenues from its real-world asset (RWA) backing and DeFi lending activity for savings DAI (sDAI) holders. Meanwhile, Ethena’s “synthetic dollar” USDe harvests the funding rates with a carry trade, and shares the revenue with those who lock up (stake) the token on the protocol.

Gyroscope markets its U.S. dollar-pegged token as an “all-weather” stablecoin, aiming to shield investors from stablecoin failures. It backs its value with multiple stablecoins deployed in certain strategies such as yield-generating sDAI and USDC in Flux, and also supports automated market-making (AMM) strategies like LUSD and crvUSD.

The project raised $4.5 million in venture funding led by investment firms Galaxy and Placeholder VC. Gyroscope has a $29 million in total value locked on its platform currently, DefiLlama shows.

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