Anonymity Mining v1 (AMv1)
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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 On the contrary, when withdraw, a certain amount of CYC will be bought back from DEX (e.g., mimo) using IOTX withdrawn, and immediately burned.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
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)
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
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.
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.
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.
