Cyclo Protocol Launches on Flare to Deliver Liquidation-Free Leverage (17 Dec)

Dubai, United Arab Emirates, December 17th, 2024, Chainwire

Flare, the blockchain for data, has announced the launch of Cyclo, a novel decentralized protocol for leveraging digital assets. Cyclo’s liquidation-free model allows users to leverage their holdings without the traditional risks associated with margin trading, with sFLR (Liquid Staked FLR) starting as the first supported asset.

The introduction of cysFLR – a tokenized representation of leveraged sFLR – allows users to unlock capital efficiency while maintaining flexibility in terms of position management. Users can lock their sFLR to mint cysFLR on a 1:1 basis, representing the dollar value of their staked assets. These tokens can then be traded on decentralized exchanges such as SparkDEX on Flare, facilitating innovative trading strategies without risking liquidation.

For example, with Cyclo users can lock sFLR to mint cysFLR, sell cysFLR for stablecoins like USDC, deploy those funds elsewhere, and later repurchase cysFLR to reclaim their original sFLR. cysFLR's design enables it to trade within a bounded range of $0 to $1, depending on market demand for leverage, offering new opportunities for DeFi traders.

Cyclo thrives on Flare's robust ecosystem, underpinned by the Flare Time Series Oracle (FTSO). The FTSO provides decentralized and reliable price feeds critical for maintaining the integrity of cysFLR mints. Unlike external oracle solutions, Flare’s native oracles operate at the network level, ensuring accurate and resilient price data with minimal vulnerability to manipulation or failure.

The FTSO’s unique architecture relies on a network of approximately 100 independent data providers, selected through delegated staking by Flare users. This decentralized design guarantees economic disincentives for misbehavior, ensuring unparalleled security and stability. Moreover, the permanent backing oracle ensures cysFLR can operate permissionlessly and immutably, reducing the risk of failures or systemic issues.

Cyclo users can continue to earn rewards through FlareDrops, delegation, and staking while locking their sFLR. Additionally, users are eligible for rFLR incentives, creating further opportunities for yield generation.

The launch of Cyclo sets the stage for additional leverage opportunities as Flare expands its range of tokenized assets. With the forthcoming rollout of FAssets – tokenized versions of non-smart contract assets like BTC and XRP – Cyclo is positioned to introduce cyBTC and cyXRP. These assets will replicate the leverage capabilities of cysFLR, maintaining bounded price movements while eliminating the risk of liquidation.

By combining the efficiency of Flare’s enshrined oracles with a liquidation-free model, Cyclo redefines onchain leverage, offering a user-friendly alternative to traditional margin trading. This innovative design unlocks new opportunities for traders, investors, and DeFi participants, driving broader adoption of decentralized financial services.

About Flare

Flare is the blockchain for data: an EVM smart contract platform specifically designed to support data intensive use cases, including Machine Learning/AI, RWA tokenization, gaming and social. With decentralized, enshrined oracles secured at the network layer, Flare is the only smart contract platform optimized for decentralized data acquisition: price & time series data, blockchain event & state data, and web2 API data. By giving developers trustless access to the broadest range of data and data proofs at scale and for minimal cost, Flare expands the utility of blockchain and supports the development of new and improved use cases.

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