During the last bull market, DeFi was widely regarded as one of the most disruptive innovations in blockchain technology. However, great concepts often face many challenges. Due to imperfect technology or structural flaws in the design of the economic model, many projects eventually fall into a death spiral and eventually fail to return to zero.
At a time when Meme and Dogecoins are rampant, how can Defi regain its former glory? Syncus may be a potential solution.
🤖About SyncusDAO
On the DeFi track, zkSync Era, as an extended solution for Ethereum Layer 2, plays an important role in promoting the development of the Ethereum ecosystem with its characteristics of high efficiency, low cost and strong security. This provides a viable, high-performance platform for DeFi projects, and it is against this background that Syncus was born.
Syncus DAO is a decentralized currency reserve protocol deployed on the zkSync Era chain, focusing on DeFi applications that develop and thrive in the zkSync ecosystem, and providing a liquid market for SYNC holders. Syncus is committed to becoming the center of the zkSync DeFi ecosystem, a true decentralized “bank”.
🤖The wrong path of Defi in the past
Before formally interpreting the redefinition of game theory proposed by Syncus, let us first review the success and failure of OlympusDAO.
OlympusDAO is a groundbreaking project in the DeFi space that aims to create a decentralized reserve currency protocol using its native token OHM. Through the innovative ve(3,3) model, Olympus achieves rewards for positive behaviors that are beneficial to the collective and solves the problem of dilution of the rights of token holders to a certain extent.
However, although the (3,3) strategy adopted by OlympusDAO is innovative, it has a flaw in the assumption that pledges need to be bound, and this assumption does not fully conform to reality. In practice, bond buying behavior in the market deviates from expected participant behavior.
🤖Optimization of Syncus based on VE(3,3) model
The design philosophy of Syncus is to transcend the traditional prisoner's dilemma by creating a mechanism where each participant's actions promote the overall interests of the ecosystem. In this way, even in the presence of potential competition or opposition between participants, the entire system can still achieve a win-win situation.
The strategy adopted by Syncus ensures that even in actions that appear to be detrimental to the system, the DAO and its long-term stakeholders (token holders) still benefit. This mechanism is similar to a decentralized casino, where the DAO and its long-term participants can always profit from the system.
🤖Two-player model and the flexibility of SYNC
In the Two-player Model within Syncus, any sale of SYNC results in a loss for the seller but a benefit for the stakeholders. This dynamic ensures that the value of the DAO continues to flow.
At the same time, each transaction will bring benefits to the DAO. Even if the token price remains unchanged, the DAO benefits by extracting a certain percentage of taxes from each transaction. This mechanism attracts more participants to join, forming a Self-sustaining ecological cycle.
This model is fundamentally different from a typical crypto Ponzi scheme or meme coin. Even as SYNC's activity weakens, remaining APY distributions could reignite interest, thereby contributing to the recovery cycle.
A better graph for Syncus would be one that describes the actions taken by a player and the results for that player and the DAO.
In short, Syncus aims to create a DeFi that can not only solve the collective action problem caused by the prisoner's dilemma, but also ensure that the DAO and its participants benefit together by cleverly utilizing game theory principles and optimizing its strategy through a series of innovative measures. ecosystem. We will introduce in detail the two main optimization measures implemented by Syncus later.
🤖SYNC Token Design
Syncus’ token economic model is a key component of its mechanism design. The governance token of Syncus is $SYNC, with a total token supply of 4,186,731,698 SYNC. As of March 18, the SYNC token price was 0.03071, with a total market capitalization of approximately 130 millions.
These features ensure that the interests of token holders are closely aligned with the long-term success of the entire ecosystem. From token issuance and distribution to its application in governance, Syncus aims to ensure a transparent and fair economic model in which the token economic model evolves in parallel with the development stages of its DeFi platform.
🤖Innovation 1: Syncus’ adaptive tax strategy
SyncusDAO is designed with the long-term sustainability and longevity of its ecosystem in mind. To achieve this, they implemented a flexible tax regime for sales and pledge transactions. This approach ensures that Syncus can adapt to market fluctuations, maintaining stability and growth over time.
Specifically, the Syncus protocol dynamically adjusts sales taxes and cancels staking taxes based on market fluctuations. During periods of significant price increases, Syncus will temporarily increase taxes on sales and staking transactions. The purpose of this is to reduce speculative trading and ensure the stability of the protocol.
During periods of market stabilization, taxes will be reassessed and reduced accordingly. This adjustment is also influenced by the current staking APY, ensuring that the tax policy remains fair and proportional to the returns earned by stakers.
🤖Innovation 2: Syncus treasury (treasury-backed token) mechanism
In addition to innovative adaptive tax strategies, Syncus also introduces a unique set of mechanisms designed to provide consistently high APY by growing its treasury, thereby creating a new paradigm in the DeFi space.
Syncus recognizes that until it reaches significant market share, demand for SYNC will come from the high APY it offers. In order to maintain and grow APY, the core issue facing Syncus is how to grow its treasury.
Through the lessons learned from OlympusDAO, Syncus pointed out that although bond issuance can increase the treasury, it has a dilutive effect on holders, and if bond issuance is removed, it will be difficult to maintain an attractive enough high yield. Additionally, early investment activity and liquidity provision did not consistently provide high enough yields to grow SYNC's market share.
Therefore, Syncus innovatively combines the tax mechanism with Olympus's treasury distribution method to create a new type of token. By taxing every operation such as buying and selling, and using these taxes to fund the treasury, real income is generated for holders.
Such a model design theoretically produces a self-growing flywheel effect. Syncus creates a flywheel effect similar to OlympusDAO by capturing the demand for SYNC and converting it into the growth of the treasury, but more sustainable: high yield- > More demand -> Transaction volume -> Treasury growth -> More revenue -> More demand. This cycle is self-reinforcing, ensuring that every token has real value.
🤖Summary
Syncus represents the arrival of a new era in DeFi, learning from past experiences and developing towards a more stable and sustainable future. Using game theory, it goes beyond the traditional prisoner's dilemma model and proposes a model that is more beneficial to the DAO itself and its long-term stakeholders.
By implementing transaction taxation and treasury mechanisms, it encourages individuals to make positive behaviors that ultimately benefit the collective and avoid falling into a death spiral. This innovative move by SyncusDAO not only brings new ideas to the DeFi field, but also provides a solid theoretical foundation for its long-term development and sustainability.
All in all, as more and more innovative DeFi projects are springing up, we can expect the market to regain confidence in the DeFi track, allowing it to still have the opportunity to take the lead in this bull market. Coquettish.
