ACYC Reimagined

Where decentralized finance meets crypto hedge funds

6 min readJan 5, 2024

Our vision for ACYC has been unwavering from the moment we launched - to create a protocol that can act as a decentralized hedge-fund across as many asset classes in Web3 as possible; enabling people to provide funds to be managed in markets they don’t want to trade themselves, without the overhead required in traditional finance. In the two years since our initial launch, that vision remains the same. In order to fulfill that vision though, everything about the model needs to change.

Despite having manually reflected nearly $1 million dollars in $ACYC to holders, and automatically reflected many millions more, the original design for the protocol could not work to create something sustainable and scalable. It lacked funding, structure, timelines, resiliency, proper incentives, and had no path forward to decentralization. Realizing this, we have spent our time modeling out a system that solves all of those problems; one we hope and believe can become a behemoth in the space, and we are very excited to share that plan with you all now. Our goal is the same, the path there is completely different.

Protocol Design:

One of the biggest core changes to the protocol is in how funds are raised, traded, and distributed. Previously, the treasury would only receive a small % of the sales made on $ACYC token - there was no way to directly contribute your funds to the ACYC protocol for management. Beyond that, whatever funds did go to the treasury, there was no structure for creating returns and scheduling the distribution from the rewards of trading. This has all changed with our novel model for Trader “Ponds”.

Ponds are bins hosted by individual traders; each having it's own types of asset-classes traded, unique Operators/Traders, target goal of returns, and an estimated duration. This system allows contributors to directly finance an individual trader in exchange for a share of their Pond and exposure to their trading.

When a Pond reaches its target return goal, it is closed and the returns from that are split between Pond Contributors, Pond Operators, operative costs, and buying $ACYC then reflecting (aka distributing) it to $ACYC holders (eventually Stakers). This gives you full exposure to the markets traded in that Pond without having to do any of the trading yourself.

By utilizing Trader Ponds, the protocol is no longer reliant on one individual operator, investment strategy, or performance and return structure. It becomes a robust and resilient system with no single point of failure or ineptitude.

Here is the flow of funds in the protocol:

You may be thinking now, “well that sounds good, but where else does the $ACYC token fit into this?”

Because $ACYC is purchased with a % of all Ponds contributions and distributions, as well as eventually being required to buy/stake tokens to commit to Trader Ponds, it benefits from activity on the protocol regardless of individual trader's Pond performance. The tokens purchased from deposits and distributions are initially distributed to all $ACYC holders pro-rata to their individual holdings through manual reflections, and later only to $ACYC Stakers. Thus, $ACYC acts as an index for all traders and Ponds within the ecosystem, benefitting from all activity on the protocol.

Not only that, but $ACYC will also be used as the main means for governance over the protocol as it scales, eventually being used to elect/remove operators, force closure of Ponds, make protocol-level decisions, and much more!

Buying and holding $ACYC provides you exposure to the entire ecosystem, without directly exposing you to the risk involved with contributing directly to Trader Ponds.

Path To Decentralization:

The reimagining of ACYC and development into a fully decentralized fund will be realized through 3 main phases of development. Each phase will enable the subsequent, allowing the protocol to be tested and iterated upon until the final Phase is reached. At that point, what happens to ACYC will be entirely up to the participants of the protocol.

Phase 1: Pre-defined Ponds & Operators

This is the phase ACYC is currently in, with focuses on testing the infrastructure and model for traders to bootstrap capital, make returns, and have those be redistributed through the protocol. We will be internally electing Operators to manage the first Ponds, as well as partially seeding them from the original ACYC treasury.

During this phase, users will be able to contribute funds to these pre-defined Ponds, and share in the rewards from the trading - should the chosen Pond be successful.

The first Ponds will be announced and opened soon, so stay posted!

Phase 2: User-defined Ponds & Operators

This second phase of ACYC’s development marks the transition period into a fully decentralized infrastructure/fund. In this phase, any Trader/User of the protocol will be able to attempt to open a Pond, subject to our approval. If approved, they will be able to define the purpose, goals, etc. of their Pond and raise the capital to trade with.

It is during this Phase as well that we will introduce staking $ACYC 2.0 as a requirement to contribute to a Pond. Users will have to purchase a % of the amount they want to contribute as $ACYC tokens, and stake them to that individual Pond.

Phase 3: Full Decentralization

Phase 3 of ACYC will be the release of full governance for the protocol, with $ACYC token at the center of it all. At this stage, $ACYC will be used to elect/remove Operators, for voting on protocol-level decisions, and for any other things requiring governance.

We will also introduce protocol-level staking of $ACYC, where participants will be able to stake their tokens to the protocol itself, and not just an individual Pond. This will allow participants to govern the protocol, as well as receive the reflections from Pond returns.

Phase 4: ???

At this point, ACYC will have many varying Ponds, all with different Operators, return goals, asset classes under management, etc. It will be a fully-realized decentralized fund that allows Users to allocate funds to the traders and assets that they want to have exposure to, without having to trade those markets themselves as individuals.

The initial vision for ACYC will be realized, with the holders/participants free to determine its future from there through it’s governance model!

How to get involved:

As of the release of this article, we are finalizing the web, testing contracts, and organizing the first Ponds and Operators for the platform that, when released, will allow you to contribute to their Ponds and share in the rewards upon their closure.

Until then, you can purchase the $ACYC token to get exposure to the overall ecosystem, as well as read up on our documentation for more details into everything!

Stay posted on updates by following us here on Medium, on Twitter, and by joining our Telegram!