Anonymity Mining v1 (AMv1)
Anonymity Mining v1 (AMv1) has been used for anonymity pools on IoTeX ( https://cyclone.xyz/iotx), which will be gradually deprecated in next 3 months. All newly launched pools are based on Anonymity Mining v2 (AMv2).
Anonymity Mining v1 is composed of two parts mint-n-burn and anonymity fee. The entire process look like below.
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 On the contrary, when withdraw, a certain amount of CYC will be bought back from DEX (e.g., mimo) using IOTX withdrawn, and immediately burned.
Deposit and Mint
Burn and withdraw
CYCPriceis the price of CYC token in IOTX, and
ais the bonus rate which starts with
2and linear decrease with every a quarter of the max number of deposits allowed in the pool. e.g.,
a = 2if there are 380 deposits in the pool 1, and
a = 0.5if there are 5300 deposits in the pool.
For example, if
CYCPrice = 1,000 IOTXand
a = 1, the table above looks like below
CYCPrice = 1 IOTX, the table above looks like below
Whenever users use Cyclone Protocol, they pay a 1% fee of the underlying coins/tokens per withdraw for all pools, known as anonymity fee. The charged fees are added to the anonymity pool. This has the effect of splitting the aggregated withdrawal fees between all existing anonymity providers.
Thanks to the bonus rate
a, 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.
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.