Protocol Components

CygnusDAO consists of a Protocol and a DAO.

Cygnus

Cygnus is the core protocol which all operations are run on. The 3 main users are:

• Borrowers: Liquidity providers in DeFi who provide liquidity on DEXes. With Cygnus they can choose to borrow stablecoins using their liqudidity as collateral. Cygnus allows borrowers to either borrow stablecoins (ie. receive stablecoins in their wallet) or leverage their positions (ie. use the borrowed amounts to buy more liquidity). Their collateral is constantly earning in value due to the accumulation of trading fees and liquidity mining rewards.

• Lenders: Stablecoin holders who want to maximize their yield at no risk of impermanent loss. Cygnus can provide a higher stablecoin return for lenders since the interest rate that borrowers pay is based on the liquidity pool APR (from the trading fees) which is usually amongs the highest in DeFi.

• Liquidators: Anyone on the network can liquidate a debt position (ie. repay the loan) once their collateral is at 100% debt ratio. Liquidators are incentivized on the network to liquidate positions as they receive a profit from doing so from each liquidation.

Cygnus is a permission-less protocol. As such, any user can create any individualized lending pool they wish (as long as our oracle can price the collateral, aka the Liquidity Token). To ensure a successful launch of the protocol, the DAO will be responsible for approving lending pools in its early stages. As the project matures, we will free this process from the DAO.