In an innovative move within the decentralized finance (DeFi) landscape, the stablecoin project Gyroscope has introduced a new trading infrastructure called Rehype. This development aims to boost capital efficiency for crypto users seeking yield through the process of rehypothecation – the practice of lending out the collateral backing a loan.
Maximizing Yield with Rehype
Gyroscope’s Rehype liquidity pools are designed to maximize yield by exposing depositors to at least three sources of yield from lending assets into the pool. Lewis Gudgeon, the co-founder of the project’s development team, FTL Labs, highlighted the potential of these pools to generate returns often reaching around 15%.
An Answer to the Demand for Higher Returns
The launch of Rehype responds to the DeFi community’s demand for higher returns, even on stablecoins, which are traditionally considered the least volatile assets in the crypto space. Gyroscope’s approach, through its “all-weather” stablecoin product GYD, aims to maintain its dollar peg by diversifying its reserve backing into trading pools that can earn fees.
The Role of Rehype in Stablecoin Trading
Rehype will primarily focus on providing liquidity for stablecoin trading, acting as the automated market maker to facilitate continuous buy and sell orders while taking a percentage of each trade. Depositors lending assets like USDC and USDT to the pool will benefit from the additional yield generated through rehypothecation and participation in Gyroscope’s SPIN program.
The SPIN Program and Governance Tokens
The SPIN program is set to offer loyalty points to users based on their pool activities, paving the way for a future governance token distribution. This approach follows the recent trend in crypto, where protocols use point programs to engage users while keeping the specifics of token releases under wraps.
Since its launch on the Ethereum mainnet in early December, Gyroscope’s GYD stablecoin has seen fluctuations in its total supply, indicating active participation in the ecosystem. The introduction of Rehype liquidity pools by Gyroscope is a strategic step towards enhancing yield opportunities in the DeFi space, promising a more efficient capital utilization for crypto users.
