Hotbit AMA🎉： Cyclone Protocol (CYC) AMA in English Telegram
AMA content review
💗Guest:Core Developer of Cyclone Protocol — bf945
Sara: Let’s welcome bf945 @cycloneadmin, Core Developer of Cyclone Protocol to introduce 【Cyclone Protocol】 to us in AMA. Could you introduce yourself and what is Cyclone Protocol?
bf945: Hello, everyone! Cyclone Protocol is designed and developed by an anonymous team, and I am one of the core developers among them. My name is bf945.
Cyclone is a multi-chain, non-custodial, privacy-preserving protocol. Cyclone applies zkSNARKs to enable transactional privacy by breaking the on-chain link between depositor and recipient addresses. This is a brief intro. Thanks!
Sara: Thanks for the introduction. Let’s start my questions.
What was the original purpose of designing Cyclone Protocol and how does it protect the privacy of user transactions?
bf945: Users’ transaction history and account balances are public on the blockchain. All transactions can be seen on block explorers like Etherscan. It is easy to figure out a user’s asset holdings, transaction records, source of funds, etc. Even worse, one’s on-chain activities can be monitored through these data! So how can we protect the privacy of these transactions? Cyclone is here to help!
Cyclone protocol is simple — a user deposits cryptocurrency into a pool and later withdraws from the same pool, which obfuscates the deposited tokens’ history. For deposits, the user sends a “secret” in the form of a hash (called a commitment) and the deposit amount to the Cyclone smart contract. The contract accepts the deposit and adds the commitment to its list of deposits.
Later, when the user decides to make a withdrawal, they provide proof via the same secret via an unspent commitment from the smart contract’s list of deposits. zkSNARKs technology allows this to happen without revealing which exact deposit corresponds to this secret. The smart contract checks the proof, and transfers the originally deposited funds to the address specified for withdrawal. An external observer will be unable to determine which deposit this withdrawal came from.
Sara: Quite detailed explanation. How is Cyclone different from other anonymity protocols? Like Tornado.
bf945: This question is great! Currently, Tornado has worked great on Ethereum and proved the usability. But as users by ourselves there are limitations by Tonardo:
1. The degree of privacy it provides is proportional to the anonymity set in each of its pools and always ongoing deposit and withdraw actions. It requires a properly designed incentive mechanism;
2. It only supports Ethereum. It is not available on other blockchains;
3. It only works as a standalone service and not open to other dapp/defi protocols; number 3 is extremely important.
Cyclone is built to address these problems and aims to provide enhanced economic incentives, multi-chain capability and decentralized governance via the $CYC token — the core parts of its token economics are mint-n-burn, anonymity mining, and liquidity mining, and it will be open to other dapp/defi applications.
Sara: Why does the team stay anonymous?
bf945: Great question! A team working on blockchain privacy, we prefer to stay private, like many other privacy related projects.
When we stay anonymous, we can focus on building the protocol and products. All the code we built is open-source and accessible to everyone. And the token model is designed for community as well, no pre-mine and fair launch.
We also believe that community will be the driving force for future governance, applications and adoptions, just like bitcoin/monero.
Sara: Please explain in detail the incentive and mining mechanism of Cyclone Protocol？
bf945: Cyclone Protocol is fueled by the CYC token. In order to stimulate the growth of the community, we have designed “Mint-n-Burn, Liquidity Mining, Anonymity Mining” in the token economy. Those that contribute to Cyclone will earn CYC. Let me introduce these three mechanisms in detail.
Everyone can mint or burn CYC! Just deposit to the asset 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. This design creates an elastic supply of CYC.
Users can provide CYC to DEX (such as mimo, later uniswap) to produce CYC-IOTX Pool Tokens, and then deposit CYC-IOTX Pool Tokens into the contract, you can earn Daily Liquidity Rewards! The Daily Liquidity Rewards means that there will be 25 CYC tokens every day, which will be proportionally distributed to users who stakes CYC-IOTX Pool Tokens.
Whenever users use Cyclone Protocol, they pay a 1% fee (of the underlying coins/tokens) per withdraw for all pools. The charged fees are added to the anonymity pool. This has the effect of splitting the aggregated withdrawal fees between all existing anonymity providers.
To summarize, users can earn CYC under these mechanisms.
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.
A sneak preview: we are working on a V2 of the protocol which will be announced very soon!
Sara: let’s move on to the next question.
What’s the utility of CYC token? Why shall we hold CYC token for long term?
bf945: While the Cyclone Protocol is an anonymous protocol that protects transaction privacy on multi-chain, the CYC token can be seen as a unified pass for anyone using this protocol, which is designed to effectively motivate anonymous providers, liquidity providers and users.
In the long run, we envision all DeFi projects need a privacy layer, which Cyclone provides. We are launching Cyclone on different blockchains and connect with different DeFi projects. The early adopters and longer term holders will benefit from the growth of Cyclone project.
Sara: Why did Cyclone Protocol choose IoTeX as the public chain for its initial launch? What’s your plan to launch on other chains?
bf945: Cyclone choose to launch on IoTeX first as it is a fast and feature-rich blockchain with a healthy global community. Most importantly, they are one of very few public chains that already have cross-chain bridges functional (ETH, BSC, etc.) and the fee is low, easy for any user to participate. CYC is supported by Halo, the development incentive plan of IoTeX Foundation. The tech supports we received are great, they provide amazing developer tools and iterate fast. We like their platform, good for builders.
We had a successful launch on IoTeX and got great traction there. We plan to launch Cyclone to other blockchains, like Ethereum and BSC/Heco, very soon.
Sara: How is your community growing so far? How can the global community participate into the future governance of Cyclone?
bf945: Cyclone community has grown very fast since the project launch. There are 10K+ followers on Twitter, and in Telegram Group, we have 14.4K+ community members.
Cyclone governance is inspired by the Compound Governance Model. Cyclone will be governed and upgraded by CYC token holders using three distinct components: the CYC token, governance module (Governor Alpha), and Timelock.
Together, these contracts will allow the community to propose, vote, and implement changes towards Cyclone. Proposals can include changes like adding support for new assets, optimizing current token pools, adjusting CYC’s minting/burning rates, and more.
Sara: What is the future plan for Cyclone?
bf945: We are currently working on Cyclone V2 and will launch very soon. There are a few highlights in V2:
1. Improved token model to incentivize more assets to join
2. Pools with a variety of tokens
3. Cross-chain to BSC and ETH.
4. Liquidity mining with other pairs
5. New burning model
6. Onchain governance
Many exciting features! Please stay tuned!
Sara: Now, let’s proceed to the next session public Q&A, Now let’s invite @cycloneadmin to pick some good questions to answer.
@WildLifeblood: 1. when will the bootstrapping phase end? I ask because I have noticed something odd between the 4 and 5 of March, there were no withdrawals but the circulating supply not only not increased by 25 CYC but decreased!
2. Which is the total supply of CYC? This isn’t so relevant, just curiosity
bf945: Thanks for keeping close eye on us! 1. Supply decreased because some tokens were moved to ETH. That’s how uniswap has some tokens to kick off liquidity.
2. Check out here: https://cyclone.xyz/analytics
@S_H_BALA: Who is your investor? How do you generate revenue to sustain the project? What are your goals to the end of 2021 and beyond?
bf945: No investors. We got halo grant from IoTeX foundation. We also accept donation from the public.
@EmmaSophiaa: Many projects rug pulled and exit scam recently. Why should investors trust your project not to do the same?
bf945: Good question! 1. All code are open sourced. 2. No pre mine or investor. 3. All liquidity are provided by community. So no rug pull
@Lovross10: Smart contracts are prone to bugs, how efficient and secure is your smart contract. Have you ever been audited through external parties, so we are sure that this project is safe and good for the future of investors?
bf945: Core part of our smart contract code is audited. We are working with a complete audit with an external audit company now. Details will be released soon!
@xuanhanh372609: Most projects first run on BEP2 or Ethereum for a long time before moving on to their own blockchain. What about Cyclone Protocol? Is there any difference? What is your marketing strategy? What are your expectations for the Cyclone Protocol project in the cryptocurrency world in 2020?
bf945: We are not going with our own blockchain. Cyclone is first launched on IoTeX. Now we are working on V2 and to be launched on BSC and ETH. Cyclone will be a privacy layer for all DeFi projects. But not a separate blockchain. Thanks!
@starshades007: I’m a developer, and I’m interested in contributing to your project alongside earning, do you have any Bug Bounty to check for vulnerabilities?
bf945: yes. Please shoot any bug report or vulnerabilities, especially for our smart contracts. We will offer bug bounty!
@Omarhamood89: Are you planning to burn or buy back any tokens from the market in the future? Do you have such programs?
bf945: we have buyback designed in smart contract. It is automatically buyback and burn.
@Marjukajahan: Southeast Asia is a very vibrant market and many project developed here so with your project what do you think about Southeast Asia and do you have any plan to develop here?
bf945: Cyclone protocol is global and decentralized. Anyone from any country can use it. Actually we are trying to make it available to all blockchains too. Feel free to start a region focused group. I can also help out.
@Saradgyawali: Why did you choose your project on IOTEX chain? Is there anything that is Unique?
bf945: I actually answered this question above. Besides these, IoTeX has done great on cross-chain. That allows us deploy CYC token cross different blockchains. The tokens are linked. This is very cool!
Sara: Thanks for joining us today. If you want to know more about Cyclone Protocol or have more questions about Cyclone Protocol, please check
Cyclone Protocol’s website and community links can be found here.
Official Website: https://cyclone.xyz/