No one can deny the financial freedom DeFi activities have brought to the public. The ability to commit your tokens and earn from them in different ways, even in small quantities, has lowered the barrier of entry and ushered in a new era of income generation. No wonder it is a $75 billion+ industry today.
But according to Cylum, the industry still has a few friction points and it aims to resolve these by introducing some novel solutions.
Staking is considered the most basic of DeFi methods through which one can earn. However, staking requires either depositing crypto assets into a centralized platform or a smart contract. In both cases, the assets are not in the control of their owners. Cylum’s novel Auto Staking algorithm requires none of this. The native $CYM tokens are tracked using the open nature of blockchain and with data on wallets holding the tokens, that is enough for Cylum and it considers them staked. The staking rewards are calculated and automatically sent to the respective wallets. All the token owners have to do is hold $CYM in their wallets.
The rewards are calculated at 0.75% per minute and paid into the wallets at every block generation. This leads to the second benefit, the Auto Compounding. With the staking rewards being paid out in the private wallets directly, each time it is calculated with more $CYM in the wallet. A 0.75% of interest per minute means that over the course of 12 months, an industry-leading 395.677% APY is generated!
While the compounding value does reduce after one year, the new APY is still a significant value and token holders are still able to enjoy a higher than normal market interest and income generation.
Such a massive influx of income leads to the last crucial aspect: the Auto Burn. Apart from a limited number of tokens in existence, Cylum also runs a burn mechanism, in which the network sends 2% of its total circulating supply to a wallet that is inaccessible, rendering the tokens useless. The resulting supply shock boosts the $CYM value. The Burn contract, integrated within the main Cylum one, sets aside the $CYM for the burn at a linear and periodic burn so all stakeholders are aware in advance and no pump and dump scheme can be hatched.
The three-pronged auto mechanisms are designed for $CYM holders to enjoy a high interest on their tokens, but that only goes as far as catering for an exponential increase in token quantity. The other important aspect of a true financially viable product such as Cylum’s offering is a greater degree of control on ensuring a value increase of the overall token.
While this is largely corrected with the Auto Burn feature, flash crashes, adverse market situations and other issues can put a drastic pressure on the $CYM price. Cylum employs a cold wallet storage (Cylum Cylinder) with a significant quantity of BNB as a defensive mechanism. In case of any negative market situation, the Cylum tokens can be protected through the acquired and stored BNB in the Cylum Cylinder.
The Cylinder also comes in handy in the long run, as it not only decreases risks to the tokens and their value, but at the same time, its increasing value can also be used to fund different activities that can be beneficial to Cylum’s long term viability and market or services expansion.