The stablecoin project Gyroskop runs a points program and launches high-yield liquidity pools

• Gyroscope introduces a high-yield liquidity pool aimed at generating income from trading, asset re-hypothecation, and loyalty points.

• Proponents describe the new product as extremely capital efficient.

Stablecoin project Gyroscope is launching new trading infrastructure that developers say will improve capital efficiency for crypto users looking for yield.

The new liquidity pool product is called Rehype – short for rehypothecation, the practice of borrowing the collateral that secures a loan. This can increase the risk of lender default, but also increases the income generated from loans.

Gyroscope's Rehype liquidity pools are designed to maximize returns. Lewis Gudgeon, co-founder of the project's development team, FTL Labs, said that by lending assets to the pool, depositors can benefit from at least three sources of income. According to a press release, the pool's actual return is expected to “frequently” reach around 15%.

The product’s existence is a sign of the times in decentralized finance (DeFi). Forget the “high interest” 4% APY accounts offered by traditional banks. In DeFi, risk-taking traders are demanding higher returns even on their stablecoins, the dullest and least volatile crypto asset around.

Gyroskop's own stablecoin product called GYD is marketed as an “all-weather” stablecoin that aims to maintain its dollar peg by holding other stablecoins. According to protocol documents, it plans to store a “significant portion of its reserve coverage” in trading pools where these stablecoins can earn fees.

Rehype’s main focus will be providing liquidity to people who want to trade stablecoins. It serves as an “automatic market maker” that ensures that buying and selling flows and every trade is cut off. Depositors who lend assets to the pool receive a reduction in fees. Gudgeon said the pool will take assets such as USDC and USDT.

“Behind the scenes, they are automatically re-staking and converted into specific tokens depending on the exact pool,” Gudgeon said. This rehypothecation will bring additional returns to depositors, he said.

The story goes on

The final source of revenue will be loyalty points from Gyroscope’s new “SPIN program.” Users who participate in the pool receive points based on their activities. As with many points programs, it is the basis for future distribution of governance tokens.

Points programs have been very popular in the crypto industry lately as they offer protocols a way to gamify their user base ahead of a token airdrop while maintaining an air of ambiguity about the token's release. Regardless, they were a success, and many protocols boosted their stats by encouraging users to perform certain actions that allowed them to earn points, such as: B. borrow, lend and trade.

Since launching on the Ethereum mainnet in early December, the stablecoin's total supply has fallen from highs above $3 million to its current level of nearly $1.7 million. According to a Dune dashboard, just over 30 people own GYD worth more than $100.

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