GYSR
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GYSR

A Retro on GYSR’s Launch

We have been humbled by how much interest GYSR has gotten in the roughly three weeks since we went live. After launching on October 28th, it took less than a day for our project to break $20 million in total value locked, and that number peaked several days later at over $100 million TVL.

In the initial rush of excitement, the price of $GYSR went on a rollercoaster ride. There were seven days between when investors could start farming and when the $GYSR token became tradeable. When trading began, the token price exploded to $1000 per token after ten minutes, then it peaked at an astronomical $10,800 per coin just 20 minutes in. After about an hour, the price was back below $1000. After a day it dropped to $50. And finally, after two days, it settled at around $1 — $2, which is roughly where it sits at the time of writing.

What happened

All this price action was the result of a low circulating token supply colliding with far more demand than we expected for our project. Even an hour after trading kicked off, there were only 600 tokens available out of a fully diluted supply of 10 million. On top of natural demand for these limited tokens, the mechanics of our project — i.e. the way that $GYSR is used to multiply pool rewards — took a meaningful amount of the token back out of circulation as soon as it was accessible, creating a supply-side shock.

In parallel to the challenge we saw with having such a low amount of $GYSR available on the open market, ETH price also happened to skyrocket the same day our token began trading. We attribute some of the initial volatility to this move as well. With ETH pumping, our incentivized Uniswap pool was a risky bet for users because of the potential for impermanent loss. This meant our GYSR-ETH pool had low liquidity, which in turn, created further risk for IL via possible manipulation of the pool by speculators. The result was a circular effect of low liquidity begetting low liquidity so any swaps that involved $GYSR created price swings.

An additional point of friction with the launch was our overlapping use of LP pool incentives with five short-term pools that awarded $GYSR for staking one or more of WBTC, WETH, USDC, DAI, and UNI. Since this second set of pools used “safer” tokens (in the sense that they did not have exposure to $GYSR price) there was an alignment issue between long-term investors in the Uniswap pool and short-term speculation. Effectively, $GYSR rewards from the “safe” pools were being dumped on the market and negatively impacting our committed liquidity providers.

Lessons learned

If we had the chance to do this all again…

  1. We would supply some initial $GYSR liquidity upfront with a lock up.
  2. We wouldn’t have an overlap between LP pool rewards and kick off pool rewards.
  3. We would have less aggressive multipliers available in the kickoff pools.
  4. We would increase the initial release rate of $GYSR (either via a shorter kickoff period, or through offering a higher amount of rewards).

Since GYSR is highly configurable, we hope that new projects who are considering using our platform in the future can learn from our own launch and apply those lessons in their Geyser design.

What’s next

Ultimately, we are incredibly proud of how our contracts have stood up to being live on mainnet. There hasn’t been a single issue observed with our core smart contracts and everything stood the test of handing 100M+ TVL. With the stress and excitement of the launch aside, we are now moving on with building GYSR into a trusted utility for the wider crypto community.

We will be announcing several updates in the coming weeks. Until then, please take a look at our roadmap here, and if you have ideas or would like to learn more about our project, please come connect with us in our Discord.

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GYSR is an open platform for on-chain incentives [Telegram: https://t.me/gysr_io] [Discord: https://discord.gg/qjWa7JB]

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Alex Koren

Alex Koren

2014 Fellow at @ThielFellowship.

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