We are excited to announce the launch of Cyclo, a ground-breaking protocol that offers a new way to engage with cryptocurrencies on Flare, enabling users to leverage their holdings without the risk of liquidation.

The first asset available through the Cyclo platform is sFLR (Liquid Staked FLR), which users can lock to mint cysFLR.

What is cysFLR?

The cysFLR token represents tokenized leverage on Flare. When users lock their sFLR tokens, they are issued cysFLR tokens at a 1:1 ratio, reflecting the dollar value of their locked assets. For instance, if a user locks $1,000 worth of sFLR, they receive 1,000 cysFLR. This token can then be traded on DEXes on Flare (such as SparkDEX), where it can be paired with other assets like stablecoins, facilitating various trading strategies.

One potential strategy is as follows:

1. Lock sFLR to mint cysFLR.
2. Sell cysFLR for USDC and use the USDC for other opportunities.
3. Buyback cysFLR to unlock sFLR, keeping any excess as profit.
4. Unlock their sFLR.

Notably, cysFLR is designed to trade within a price range of $0 to $1, depending on market demand for leverage, thus offering unique opportunities for speculation and trading. This innovative approach redefines leverage in the DeFi space by eliminating traditional barriers and risks associated with leveraged trading.

Explore more strategies, contract addresses, and audit information at Cyclo’s documentation.

Why Flare?

The Cyclo protocol is uniquely positioned to thrive on Flare due to several key advantages:

• Utilization of FTSO: The Flare Time Series Oracle (FTSO) is a foundational element for Cyclo, providing decentralized and accurate USD price feeds that back cysFLR mints. Unlike other networks lacking native oracles, Flare ensures a consistent trust model between the underlying asset and its price feed, minimizing exploit risks.
• Permanent backing oracle: For cysFLR to be deployed permissionlessly and immutably without admin keys, it relies on a stable backing oracle. The FTSO’s design allows it to absorb short-term disruptions in minting while providing long-term reliability against potential bank runs caused by oracle failures.
• Unmatched security: The FTSO is enshrined into Flare’s core architecture. This mechanism ensures that each FTSO feed is supported by around 100 independent data providers, selected by Flare users through delegated stakes, imposing a strict economic cost for misbehavior and maintaining the integrity of the data.
• Earn FLR: Additionally, locking sFLR in the Cyclo protocol allows holders to continue earning native FLR rewards via monthly FlareDrops, staking, and delegation. Participation in the Cyclo protocol is also eligible to earn rFLR rewards on Flare.

What is the larger significance?

The launch of FAssets means that Cyclo could extend to include other assets such as cyBTC and cyXRP. These assets would bring similar functions and economic properties to cysFLR, such as bounded cyclical price movements without liquidation risks.

The launch of Cyclo on Flare not only enhances its functionality but also provides a secure and efficient environment for users to engage in leveraged trading without traditional risks. By harnessing the power of Flare’s unique enshrined oracle system, Cyclo sets a new standard for DeFi applications.