Token Economics

CYC Token Contract Address on IoTeX is io1f4acssp65t6s90egjkzpvrdsrjjyysnvxgqjrh

Overview

Cyclone Protocol is fueled by the CYC token, which is designed to incentivize anonymity providers, liquidity providers, and users. CYC is NOT pre-mined or pre-allocated for investors or team. Those that contribute to Cyclone will earn CYC.

  • Total Supply : ~6,000 (see https://cyclone.xyz/analytics)

  • Initial Supply: 2,021 for the community (see here)

  • Mint-n-Burn

    • Everyone can mint CYC tokens if deposits coins/tokens to anonymity pools

    • CYC tokens are burned when one withdraws coins/tokens from anonymity pools

  • Anonymity Mining: Coins/tokens are rewarded to ones who deposit coins/tokens into anonymity pools and keep them there for a while

  • Liquidity Mining: CYC is rewarded to users who provides liquidity for CYC on DEX (Decentralized Exchanges) such as mimo

  • Decentralized Governance will be enforced after launch, CYC will be used to govern the Cyclone Protocol.

Roles and Rewards

There are four roles in Cyclone Protocol.

Roles

How To Become

Reward / Fee

Anonymity Provider

Provide anonymity by depositing tokens and letting them stay there for a while

Reward 1% withdraw fee (IOTX) and mint CYC

User

Deposit-and-withdraw tokens for transactional privacy

Consume 1% fee in IOTX per withdraw

Liquidity Provider

Bond coins/tokens + CYC to DEX to provide liquidity of CYC

CYC (Daily Liquidity Reward)

Governors

CYC holders who decide how the protocol evolves

N/A

Token Economy Overview

Mint-n-Burn

Everyone can mint or burn CYC! Just deposit to the following pools and a certain amount of CYC will be minted to you. On the contrary, when withdraw, a certain amount of CYC will be bought back from DEX (e.g., mimo) using IOTX withdrawn, and immediately burned. This design creates an elastic supply of CYC.

Deposit and Mint

Deposit IOTX

Mint CYC

D

a * 0.1D / CYCPrice (MAX Limit see below)

Burn and withdraw

Buy back CYC using IOTX

Burn (CYC)

Total Withdraw (IOTX)

a * 0.1D

a * 0.1D / CYCPrice

(1-0.1a-0.01)D

Pool information

Pool

Denomination (IOTX)

MAX MINT

MAX Num of Deposits

Pool 1 (Squid)

1,000

0.2

8,000

Pool 2 (Dolphin)

10,000

2

4,000

Pool 3 (Shark)

100,000

20

2,000

Pool 4 (Whale) - TBD

1,000,000

200

1,000

CYCPrice is the price of CYC token in IOTX, and a is the bonus rate which starts with 2 and linear decrease with every a quarter of the max number of deposits allowed in the pool. e.g., a = 2 if there are 380 deposits in the pool 1, and a = 0.5 if there are 5300 deposits in the pool.

For example, if CYCPrice = 1,000 IOTX and a = 1, the table above looks like below

Pool

Denomination (IOTX)

CYC Minted/Burned per Deposit/Withdraw

Pool 1 (Squid)

1,000

0.1

Pool 2 (Dolphin)

10,000

1.2

Pool 3 (Shark)

100,000

13

And if CYCPrice = 1 IOTX, the table above looks like below

Pool

Denomination (IOTX)

CYC Minted/Burned per Deposit/Withdraw

Pool 1 (Squid)

1,000

2

Pool 2 (Dolphin)

10,000

20

Pool 3 (Shark)

100,000

200

Liquidity Mining

  • CYC can be supplied to DEX such as mimo to produce CYC-IOTX Pool Tokens

  • Deposit CYC-IOTX Pool Tokens to the contract to earn Daily Liquidity Reward

  • The Daily Liquidity Reward is composed of

    • 25 CYC tokens for the bootstrap phase

  • All CYC tokens in the daily liquidity pool are proportionally distributed to whoever stakes CYC-IOTX Pool Tokens

Anonymity Mining

Whenever users use Cyclone Protocol, they pay a 1% fee (of the underlying coins/tokens) per withdraw for all pools. The charged fees are added to the anonymity pool. This has the effect of splitting the aggregated withdrawal fees between all existing anonymity providers.

For example,

Tx

Pool 1's Denomination

Total IOTX in Pool 1

Alice deposits 10,000 IOTX into pool 1

10,000

10,000

Bob deposits 10,000 IOTX into pool 1

10,000

20,000

Carl deposits 10,000 IOTX into pool 1

10,000

30,000

Bob withdraws, where he gets 9,900 IOTX back (assuming no burning for simplicity) and pays 100 IOTX as fee to the pool

10,050

20,100

Carl withdraws, where he gets 9,949.5 IOTX back (assuming no burning for simplicity) and pays 100.5 IOTX as fee to the pool

10,150.5

10,150.5

Alice withdraws, where she gets 10,048.995 IOTX back (assuming no burning for simplicity) and pays 101.505 IOTX as fee

10,000

101.505

Thanks to the bonus ratea , anonymity providers can potentially get CYC as reward. For example, there were 100 deposits when Alice deposits to the pool, she got X CYC back. After a while, Alice decides to withdraw when there are 4000 deposits in the pool, she burns X/2 CYC to withdraw IOTX and keeps the other half as gain.

How to Earn?

1. Deposit and mint CYC 2. Earn pool denomination growth with users withdraw 3. Earn LP rewards + LP fee when join as LP 4. Deposit early to get more CYC and withdraw late to burn less. Earn the difference.

How to Use Cyclone to gain anonymity?

  1. Deposit and mint X CYC

  2. Keep tokens in the pool for a period (wait for 10+ other deposits).

  3. Withdraw to another wallet

    1. pay 1% fee to anonymity providers,

    2. buy CYC (less than X) and burn

    3. get the rest tokens

  4. Sell CYC.

Languages

中文翻译 Interested in contribute to translation? Join TG group and ask admin: https://t.me/cycloneprotocol