Gyroscope, a crypto startup that claims to be building a unique stablecoin, announced it has raised $4.5 million in a seed funding round.
Placeholder VC and Galaxy Ventures co-led the round, with Maven 11, Archetype, Robot Ventures, Balancer Labs co-founder and CEO Fernando Martinelli and others participating, Gyroscope said.
The round was closed in January 2022, but Gyroscope is making it public now because the protocol’s codebase is substantially completed and it’s gearing up for a full launch, co-founder Lewis Gudgeon told The Block. Gyroscope was founded in 2021 by Gudgeon, Ariah Klages-Mundt and Daniel Perez, all Ph.D. candidates who wrote papers on stablecoin design and DeFi risk.
Shortly after Gyroscope’s round closed, stablecoins were thrust into the limelight by the spectacular collapse of TerraUSD, the algorithmic stablecoin founded by crypto entrepreneur Do Kwon. That debacle, in May last year, destroyed around $40 billion in value and sent shockwaves through the crypto industry that are still reverberating today.
Gyroscope aims to solve the issues facing stablecoins today, including risk, adoption and sustainability. The project is a “new third path between centralized and algorithmic stablecoins,” according to Gudgeon. He said Gyroscope’s stablecoin, known as gyro dollar and assigned the ticker GYD, is non-custodial and designed to be fully reserve backed.
GYD stablecoin design
“The GYD stablecoin has a novel all-weather reserve design, where this asset reserve intends to diversify risk to the greatest extent possible,” Gudgeon said. “The design is such that if one of the assets in reserve experiences trouble, it only affects a limited portion of the reserve, not all of it. This is the key mechanism that makes GYD a unique stablecoin.”
Gyroscope is currently live in a beta version as gyro proto (p-GYD) on Polygon, for testing purposes, before the full launch on Ethereum. For this reason, FTL Labs — the development team behind Gyroscope — temporarily retains control over the protocol. Once live on Ethereum, the power will be in the hands of a DAO as part of its decentralized structure.
When asked how Gyroscope plans to onboard users, Gudgeon said if anyone cares about the core values of DeFi, they should want to use GYD for its non-custodial and decentralized proposition.
© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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