Crypto Society AMA recap with Cyclos — 2nd September 2021
Cyclos is a concentrated liquidity AMM protocol that aims to be the go-to market maker for digital asset trading on Solana. Cyclos leverages the 4000x greater efficiency of concentrated liquidity with the flexibility of Serum’s order books to radically transform the market making landscape of DeFi on Solana.
Cyclos CEO
Hi everyone
Bilo | Crypto Society
Hi Daniel, it’s our pleasure to have you with us today. I would like to welcome you here on behalf of our entire community.
Could we begin with a brief history of yourself and your team, and your roles at Cyclos and what you were doing before Cyclos?
Cyclos CEO
Sure. Our team was founded in May 2021 when my co-founder and I were introduced by a mutual acquaintance in the space. He was going from hackathon to hackathon (winning them :)) making very cool web3 apps. To put it briefly, we had an ongoing discussion between the two of us on where defi is heading and ways we could innovate the existing landscape.
Personally, previous to Cyclos, I spent two years in Research. While I obviously can’t get into the specifics, our team handled project related matters. The knowledge I gained from those two years working with some of the best projects in the space is what I’m applying to Cyclos.
Bilo | Crypto Society
That’s fantastic. thanks for sharing. How and where did you first encounter crypto?
Cyclos CEO
I first started “messing around” with bitcoin in 2014 but didn’t get into altcoins until 2017 when Antshares rebranded to NEO. I started linking up with other people online to do research and ended up connecting with the founder of a crypto media company, which I ended up joining as a partner and research head.
Professionally speaking, I’ve been in crypto since 2017. While this is a brand-new industry and things are always changing, both that role making early stage investment calls.
Bilo | Crypto Society
You’re an OG my friend!!! You must have 100’s of years of knowledge (crypto years are 100X real years LOL).
Cyclos CEO
Haha
Bilo | Crypto Society
Can you tell us about why you thought Cyclos needed to be built and what problem it solves?
Cyclos CEO
To put it simply, we saw the value presented by concentrated liquidity and how it can radically improve the existing lack of depth experienced by users of (in the case of Solana), Serum, particularly on asset pairs with not so much volume. We want as many DeFi users to switch over to Solana as possible, and for that to happen there must be 1. sufficient liquidity on order books, which can only happen if 2. LPs can receive competitive rewards for providing on Solana vs. other chains. Right now, on other platforms which overlay Serum, the APY for LPs is abysmally low. Our plan is to change that by launching this product. Put shortly, higher rewards for LPs, better depth for traders.
Bilo | Crypto Society
Nice 🔥 — I’m sure you will grab lots of attention. I mean you’ve already grabbed some top attention at Solana 😍
How did Cyclos start? and how would you describe Cyclos’s integration into the world of Crypto if you were talking to someone unfamiliar with digital assets?
Cyclos CEO
My co-founder and I were introduced via a mutual acquaintance a few months before the start of the Solana Hackathon. We had an ongoing discussion regarding Defi in the Solana sphere and landed on what we saw were some key opportunities to improve the state of affairs. The biggest issue in our minds was the fact that this incredible orderbook DEX has a lot of potential, and it’s not being fully realized. The question in our minds was “how do we make the situation better for all players here?” no LPs are going to come over and trade if the APY isn’t competitive with other chains. And no traders will want to trade (and hence, feed LP demand) if there is no volume / high slippage. Liquidity incentives themselves are not sustainable, but increased capital efficiency is. We saw that with Uni v3, and we thought we could apply that model to an order book based DEX. so here we are.
Bilo | Crypto Society
Brilliant.
Cyclos CEO
We bring a much more “traditional” notion of market making to the crypto world, except that it’s crowdsourced and decentralized. Every time someone places an order on an orderbook, there needs to be a counter order. As a HODLer, you can earn on idle assets by helping “make” the market by depositing your capital, choosing the price range you think there will be demand for the underlying asset, and watch as your capital goes to work.
Bilo | Crypto Society
Ok so to those unfamiliar with Crypto, it’s like what order desks do on a stock market where they provide liquidity so an instrument can be traded. That’s the great thing about Crypto, we the people replace the trading desk.❤️
Cyclos CEO
Precisely
Bilo | Crypto Society
Trick question coming up… lol
Why did you choose to build exclusively for Solana?
Cyclos CEO
There are a number of advantages to launching Cyclos on Solana, versus other chains. At the most basic level, our idea of bringing concentrated liquidity to orderbooks would not be possible on most other chains, because they are not fast enough when it comes to throughput speeds. There were orderbook-based DEXs on Ethereum, but they are simply too slow. Serum changed all that. Not only is a high throughput orderbook based DEX like Serum possible on Solana, but they have actively encouraged projects like ours to integrate with their DEX as an overlay. Instead of bootstrapping TVL from scratch, we see a big advantage in improving the experience for liquidity providers within an existing DeFi ecosystem. Orderbooks are more efficient than algorithmic matching, so we went to where the orderbook exists. Moreover, there wasn’t anyone doing what we wanted to do, so the opportunity was wide open.
Also important is that the foundation has been investing its time and resources into growing the ecosystem. The timing was right and so was the product fit. We are very much open to bringing this to other chains, but we think Solana is the right place to start.
Bilo | Crypto Society
I would have been happy with “ bcs it’s the best and fastest blockchain out there” as an answer but your answer is better 😂🤣
Cyclos CEO
😅😅
Bilo | Crypto Society
How is Cyclos as an AMM different from other AMMs on Solana and how is it different from say uniswap’s AMM V3 protocol? Explain the concept of concentrated liquidity.
Cyclos CEO
This is a long one so please bear with me.
Bilo | Crypto Society
Well, I am a bear😋
Cyclos CEO
The core value offering of our product is that we make your liquidity work more efficiently for you. Concentrating liquidity is actually a very simple concept. When you go onto a regular “legacy” AMM/DEX/liquidity provision platform and provide liquidity, your assets get distributed very thinly along a price curve from $0 to infinity. However, most assets hover around particular price points over a given period of time- for example, let’s say SOL is currently hovering around $100 dollars. If you provide liquidity through our competitor platforms on Solana, it is being spread very thinly across the underlying orderbook (in the case of other projects with overlay Serum i.e., Raydium or Bonfida), such that your liquidity position <$100 per SOL and >$100 per SOL is not being utilized at all, and thus, not earning you any rewards.
What if you could place 100% of your capital very tightly around the price that SOL is trading i.e., between $95-$110 (if SOL is trading around $100)? This allows for a situation whereby you as an LP are utilizing all your capital for making the market, which should net you much higher rewards. For traders trading on the orderbook, it also allows them to execute much higher volume trades, because there are more counter orders around the current price of the asset to trade against. This makes for a deeper orderbook that encourages more trading, and consequently, rewards those LPs who have open positions around the current trading price of whichever assets they are providing liquidity for.
If we compare Cyclos directly with Uni V3, there are a number of advantages we hold. Firstly, low gas fees make opening positions and changing positions on Cyclos exponentially cheaper compared to Uni v3 ($50–100 in gas per position versus a couple cents on Cyclos). This low cost also incentivizes users to concentrate their positions around even tighter price points. It also means anyone can make markets, regardless of their bag size (whereas Univ3 is limited to large players). Also, we use order books (more capital efficient) and liquidity can be deposited in any ratio (rather than set rations like 50/50, making it much easier/convenient for users).
Bilo | Crypto Society
Now you will have to bear with me while I read this lol.
Cyclos CEO
Loving the bear puns.
Bilo | Crypto Society
Ok I’ve just bearly finished reading.
Cyclos CEO
😭😭
Bilo | Crypto Society
Is Cyclos interacting with Serum only for now? If so, are there plans or talks with other exchanges?
Cyclos CEO
For now, yes. There are a number of reasons for this, the biggest one being that Serum is unique in the space. We didn’t have to reinvent the wheel to build Cyclos- we took several very impressive legos and built our own piece to fit them all together in a way that makes for a much better finished product. BUT we are always open to exploring new ideas, and we will be spending time exploring other options for scaling the product.
Bilo | Crypto Society
What is the Cyclos token used for? Can you describe the Tokenomics?
Cyclos CEO
Sure. So the main value accrual mechanism works like this, similar to CAKE or QUICK, but with a few modifications.
LPs can stake CYS tokens to get swap fee discounts. Also, a portion of swap fees will be used to conduct open market buybacks of CYS tokens, which are distributed to the stakers.
We will also conduct buy and burns with platform revenue.
Bilo | Crypto Society
I see. Thanks. Nice concept
My next question was: “Are there any incentives to holding the Cyclos token?” but you’ve answered that above unless there is more to add?
Cyclos CEO
👍👍
Bilo | Crypto Society
I see that your testnet was already launched. How did that go and what adjustments (if any) have you had to make so far and why?
Cyclos CEO
Well, there were some pretty big modifications we had to make earlier on before the testnet launch, as this product is built from scratch in rust. We had no example to go by, only the logic of how concentrated liquidity functions in theory. So that whole process took a lot of experimentation and adjusting. Getting into the “why” would require a lot of technical detail, but to put it briefly- because we want the product to work the way it’s supposed to :)
Bilo | Crypto Society
Admirable Sir!
When is your public sale?
Cyclos CEO
Next week we have a dual IDO/IEO. I believe the IDO on Solanium begins on the 6th, and the IEO on Gate happens on the 9th.
Bilo | Crypto Society
Does Cyclos have a governance process? Can you briefly describe how it all works?
Cyclos CEO
Cyclos will have governance, which we will be releasing the details on later this year.
Bilo | Crypto Society
What are you currently working on, and can you describe your future roadmap?
Cyclos CEO
6 Month Roadmap
September 2021
-launch of Cyclos V1 concentrated liquidity portal
-additional CYS token incentives: staking, fee rebates, buy and burns
-Beginning of liquidity mining
November 2021
-V1 of dynamic repositioning: automated yield optimization for liquidity management
December 2021
-Cyclos hackathon and incubator program
-Governance begins
February 2022
-Expansion to other layer 1 protocols
Bilo | Crypto Society
Thanks — Great roadmap!
Cyclos CEO
Right now, our swap is live, but the concentrated liquidity portal is not yet. We will launch that approximately 2 weeks after the public sale.
Bilo | Crypto Society
Besides Serum, who have you partnered up with so far? Are you working on any new partnerships? Can you discuss them with us?
Cyclos CEO
We are working on partnerships pretty aggressively, as our G2M strategy includes building a moat around the product fast. However, we are saving those announcements for post-public sale :)
Bilo | Crypto Society
okayyyyyyy 🙁
Is there any exclusive breaking news about Cyclos that you could share with us here today?
Please oblige me…
Cyclos CEO
Perhaps not exclusive, but we just announced the sale on Gate.
Bilo | Crypto Society
My bosses are watching. I need breaking news or I will be fired
Cyclos CEO
Haha. That’s ok. you can come work with Cyclos ❤️
Bilo | Crypto Society
Do you wish to let us know anything else that was not covered in the questions above?
Cyclos CEO
I guess for anyone reading the AMA, we really do encourage you to try out the product when it is live (and use our swap in the meantime). Besides the liquidity incentives and all of that, we really do believe that once more defi users come to understand the benefits of concentrating their asset positions, they will stick with it. I found it immensely more gratifying myself when opening positions on Uni v3 and was really impressed by the difference it makes when the lion’s share of your assets are working for you, as opposed to a tiny percent.
Crypto Society
Is your platform suitable for Crypto beginners? Or does it only appeal to professional users?
Cyclos CEO
This is a great question. The answer is yes, it is suitable for beginners. I really believe that concentrating positions is probably more intuitive to most people to understand, than the way most AMMs spread liquidity over an infinite curve. It’s easier for the mind to wrap itself around and invision targeting specific price points with those assets. Further, our interface makes it quite simple to walk through the process.
Crypto Society
Are you a global project or local project? At present, which market are you focus on, or is it focused on building and growing to gain customers, users, and partners? Can anybody anywhere use this project without Any restrictions?
Cyclos CEO
We are global. We focus on all markets. Our team is distributed and from all over the world. There are no restrictions on who can use our product as it is decentralized.
Crypto Society
Do you have tutorial videos so we can get to know your project more clearly or do you have a YouTube channel or something? can you share it with us?
Cyclos CEO
Great question. We will be sharing tutorial videos prior to launching the liquidity portal, so please follow us on https://twitter.com/cyclosfi or https://t.me/cyclosofficialchat to catch those when they come out.
Crypto Society
Southeast Asia is a very vibrant market and there are many projects developed here so with your project what do you think about Southeast Asia and do you have a plan to develop here?
Cyclos CEO
I am based in Southeast Asia, and it represents one of our core target markets. We work with some incredible regional partners from Vietnam, Indonesia, Thailand, and Malaysia who are helping us increase our outreach and draw users into the product.
Crypto Society
I wanted to follow your project for the long term. Where i can get all the latest news about your project? Do you have Twitter/Telegram/Discord community? If yes, can you share the link here because there is a lot of fake telegram/twitter groups?
Cyclos CEO
Cyclos (@cyclosfi) | Twitter
The latest Tweets from Cyclos (@cyclosfi). The first AMM bringing concentrated liquidity to Solana
Telegram: https://t.co/lxLsDiULCB…
Discord: https://t.co/5rzwifsx9K
Join the Cyclos Official Discord Server!
The official server of Cyclos — the first concentrated liquidity market maker on Solana | 2,937 members
Crypto Society
What is the name Cyclos referring to?
Cyclos CEO
Good question
Cyclos comes from the Ancient Greek word, kúklos, meaning circle. We chose this name as it embodies the positive feedback loop the platform creates by incentivizing liquidity providers to provide liquidity, which in turn delivers greater depth of trading volume for traders. And hence the cycle repeats.
Thank you, guys, for the awesome AMA. hope to see you on our social media channels and please learn as much about defi as you can! it’s the future ❤️
Bilo | Crypto Society
Thank you for your time in answering our questions here today. We are all very appreciative of your time and of the answers you have provided.
Relevant Links
⚜️ Cyclos Website : https://cyclos.io/
⚜️ Cyclos Telegram: https://t.me/cyclosofficialchat
⚜️ Cyclos Twitter: https://twitter.com/cyclosfi
⚜️ Crypto Society Twitter : https://twitter.com/cryptosocietytg
⚜️ Crypto Society Chat: https://t.me/cryptosocietyy
⚜️ Crypto Society Announcements: https://t.me/CryptoSocietyyy
