Summarised transcript of the Solana Insiders AMA with Cyclos.io
On Thursday the 14th of October, we held an AMA with Daniel – one of the co-founders of Cyclos.
Could you please give a summary of the Cyclos AMM for those here that are new to the project?
Cyclos’ core product is a market maker that brings Uniswap v3-style concentrated liquidity to Serum’s Central Limit Order Book. It offers higher capital efficiency for liquidity providers (LPs) and improves the percentage of liquidity used on Serum. This means higher yield for liquidity providers, with less capital than is currently necessary for achieving the same yield on other platforms which provide liquidity to Serum, like Bonfida, Raydium, etc. It also means much smaller size liquidity providers can make a higher profit than was previously possible on their assets without having that profit eaten away by gas fees, as is the case on Ethereum.
Besides the market maker (liquidity provider tool), which we will launch in the next coming weeks, we also have a swap, called CycloSwap, and a DEX. On top of these features, Cyclos will also be launching an incubator/launchpad product, currently planned for Q1 next year. So while Cyclos core product is the market maker, we are building out a full-suite AMM-style product at the moment.
You recently had a highly successful token sale that launched your native token $CYS; Can you please explain what the roles of the $CYS token are?
Absolutely. Let’s dig into the token utility a bit and where each utility currently is in the timeline. The first and most obvious one is that holders receive a swap fee discount. This feature is currently live on our swap. Any CYS holder currently can swap without paying any fees to Cyclos. There is a small fee (0.22%) which goes to Serum, which makes it the lowest fee tier of any swap on Solana. However, this won’t last forever. We will be increasing the number of CYS tokens for discounted swaps in the future as we acquire more users.
After launching our market maker, a portion of the fees we receive from that product will be used to conduct open market buy and burns of CYS tokens, to decrease the supply as users use the platform. A portion of the fees the platform earns will also be distributed to CYS holders once staking is enabled.
What developments are coming up in the near future for Cyclos that we should know about?
The big event coming up in over the next 2 weeks is the launch of our mainnet. We have just announced the opening of sign ups for private mainnet product testing, and by the end of the month, the fully open product will be available for all to use. Finally 🙂 Very excited to show the world what we’ve been working on and start improving the product based on our community’s feedback. We’re also really keen to get the community involved in the content generation process, which I’ll explain more about in a bit.
Question 1: My question is about your long term marketing plans. How, or through which big partnerships do you plan on utilising to pass your product onto the normal – especially non-crypto people?
We have a number of plans on this front. The first is partnerships that bridge across the Solana ecosystem from other ecosystems. This includes some very large players on other chains like Ethereum, who are looking to come into the space. As great as we think the Solana ecosystem already is, we know there is a huge amount of growing that needs to be done.
The second facet involves partnering with projects within the Solana ecosystem, which will benefit from utilizing concentrated liquidity as a tool for bootstrapping their project volume. There is quite a lot of territory there, and we plan to aggressively pursue this after launch of the market maker this month.
Finally, when it comes to reaching audiences outside crypto, this is the age old question that involves many factors. We have a rather unique marketing campaign planned for post-launch, which involves incentivizing the community to teach others about what Cyclos does and how it can benefit them. We think more experimentation with marketing at the grassroots level is needed, because community-based collaboration on marketing is one of the most powerful but underutilized tools there is to spread awareness of a project. DeFi is in many ways an abstract concept to the majority of people, so rather than only marketing Cyclos through channels which reach advanced crypto users (which we also will do), we plan to incentivize our base to help
Question 2: People are used to using raydium, besides fees, what are your advantages to attract users?
People were also used to Uniswap, and then Sushiswap came out. As did so many other amazing products like Curve, etc. We are so early in the game right now, that the market is wide open. Not only is Solana growing at an exponential rate, but so is crypto/defi in general.
Besides the higher yields/rewards offered by concentrated liquidity, we have several layers to our plans to attract users. The first- create the best DeFi tooling on Solana. That started with our swap. Next, it will include our liquidity pools / market maker -t hen, a launchpad. But better tooling is also not enough, and we know that. We will be launching liquidity incentives with our mainnet release. And further, we have some marketing plans which are still under wraps that we think will play a huge role in bringing people to our community and incentivizing their participation.
I think it’s hard for people to conceptualize how much opportunity there is when it comes to Solana and DeFi, because even though it is very early, it doesn’t feel early to those of us (both teams and community) who have been paying attention for a while now.
Question 3: We invest in the Cyclos which we believe in and more importantly where we feel like in a family. Community connections have a key role nowadays for a successful project. My question is, what are your plans to create a Cyclos’s core community?”
Well, we think Cyclos core community is already created. But if the question is, “what do we plan to deepen it?”, there are several answers. The first is that we plan to draw in even more supporters through some novel marketing campaigns. Right now, since we are so close to launching the market maker product, all of our efforts have been focused on making sure the product (and product launch) are ready to go, and that word reaches as many people as possible.
Step 1 is to launch liquidity incentives to create a real bang with the product release and draw in new people. Step 2 is to incentivize the community to start investing time into creating content and spreading awareness of the project. We will do this by drawing on community members who wish to create content such as tutorials, explainer videos, and breakdowns of Cyclos in multiple languages. We will reward our community members who participate in this type of campaign based on the reach (i.e. how many people the content reaches) as well as the quality. We plan to do this for as many languages as possible, to really expand our reach globally.
Question 4: After researching the project, I found that liquidity is provided through your platform, which is then injected into the Serum. That means Cyclos will not directly compete with Serum DEX. So what about other platforms like Raydium, Bonfida, Uniswap?
Are these the platforms that Cyclos is directly confronting? If so, what advantages is Cyclos holding to compete with them to increase demand for DEX and make Cyclos the best DEX? Are you confident about the advantages that Cyclos holds?”
Believe it or not, Raydium and Bonfida are also on top of Serum. All three platforms are built similarly in that sense. However, a big differentiator is the fact that we allow liquidity providers to concentrate their assets on specific price ranges on Serum’s order books. Raydium and Bonfida do not retain that function. Even though we really believe DeFi users will quickly see the benefits of concentrated liquidity, our strategy for competition is more expansive. When it comes to DeFi user experience, we have a team working non-stop on each product to push the UX about and beyond what is currently available on Solana.
Ultimately, it comes down to the core product offering, and that is what we will push in our messaging and marketing as we scale the product.
Solana Insiders: We can see how this will be a game changer as no other Solana AMMs allow users to set price ranges when providing liquidity.
For those who are new to being a liquidity provider, would you be able to briefly explain the advantages of setting price ranges?
Sure. Essentially, on a “normal” liquidity provider platform, a user simply deposits their assets in a fixed ratio, and those assets are spread from the price point of 0 to infinity. This means when someone executes a trade where the user is providing liquidity, only a very small percentage of that liquidity will be utilized, and the rewards that liquidity provider will receive, will correspondingly be minuscule.
On our platform, the user chooses the price range where his or her liquidity will be “active”, or available to facilitate trades. This means that a much higher proportion of the users assets have the potential to be utilized, and as a result, earn rewards, than is possible on our competitor platforms. That also means there will be a lot more depth for traders to trade using that liquidity. This will spur more frequent, higher volume trades as a result, and attract more liquidity providers to the Cyclos platform.
In other words, setting the price ranges on where liquidity is provided opens the door for liquidity providers to use their own intelligence to earn more rewards for providing liquidity. It gamifies liquidity provision and rewards smarter, more strategic liquidity. It opens up many possibilties for more advances strategies to be utilized. I may choose to place a large chunk of my liquidity just outside the current price range an asset pair is trading in, to take advantage of the price movements I anticipate will occur with the market, and earn a much higher reward as a result, for example.
Question 5: “When will the staking be launched? And how about the burn? For the most early investors, what can we get from the project?”
Farms will follow the mainnet release in October. Right now, we are shooting to launch them before the 2nd week in November. Keep in mind that anyone holding CYS tokens will be able to stake their tokens from launch, by providing liquidity within our market maker. We will be offering higher incentives for providing CYS tokens to the CYS pairs on our platform as a means to encourage holders to provide liquidity. As an early investor, we encourage you to sign up for early testing of the mainnet which will begin next week, as we plan to thank our early testers in kind 🙂
Solana Insiders: Excellent! – it’s great to hear that you will rewarding early testers of the platform.
How can people sign up to become an early tester?
They can head over to our medium and have a read through this article: https://medium.com/@cyclosfinance/cyclos-progress-update-2-55b88d99c269