Gyroscope Rolls Out Yield-Bearing Version of Stablecoin Targeting Over 10% Yield

The Galaxy-backed project aims to attract DAO treasuries to allocate to its new stablecoin.

Decentralized finance (DeFi) protocol Gyroscope (GYRO) announced Thursday a new yield-bearing version of its stablecoin, aiming to attract decentralized autonomous organizations (DAO) to allocate a portion of their treasuries in the stablecoin to earn a yield.

The new token, called "savings GYD" (sGYD), will aim to pay out a 12%-15% annualized yield to token holders, which will be variable to market conditions, according to the Gyroscope team.

"The revenue comes from the tokens' backing assets, which are placed in segregated vaults across various DeFi investment strategies," the team said in a statement. "The protocol may be able to source additional revenue from fees from its high-yield liquidity pools, launched earlier this year."

Gyroscope hopes to attract DAOs to allocate a part from their treasuries in sGYD to earn a yield, especially given the stablecoin's launch coinciding with the next leg of the protocol's SPIN points earning program. During "season 2" of the program, users will be able to choose to earn native yields with baseline points or boost their rewards by foregoing the yield.

Stablecoins – cryptocurrencies with a fixed price, predominantly pegged to the U.S. dollar – are a key piece of infrastructure for trading and transactions on blockchains. The next generation of stablecoins that pays out on yield to its holders is getting increasingly popular.

Mountain Protocol's USDM, for example, backs its price by holding U.S. Treasuries, but passes on the bond yields to token holders, unlike stablecoin giant Tether's USDT. Maker's stablecoin shares protocol revenues from its real-world asset (RWA) backing and DeFi lending activity for savings DAI (sDAI) holders. Meanwhile, Ethena's "synthetic dollar" USDe harvests the funding rates with a carry trade, and shares the revenue with those who lock up (stake) the token on the protocol.

Gyroscope markets its U.S. dollar-pegged token as an "all-weather" stablecoin, aiming to shield investors from stablecoin failures. It backs its value with multiple stablecoins deployed in certain strategies, such as yield-generating sDAI and USDC in Flux, and also supports automated market-making (AMM) strategies like LUSD and crvUSD.

The project raised $4.5 million in venture funding, led by investment firms Galaxy and Placeholder VC, and has a $29 million total value locked on its platform, according to DefiLlama.