Preface

In the last bull market, DeFi was widely regarded as one of the most disruptive innovations of blockchain technology. However, great concepts often face numerous challenges. Due to technological imperfections or structural flaws in economic models, many projects ultimately fell into a death spiral, inevitably facing the fate of going to zero. In the current environment dominated by meme coins and meme tokens, how can we restore the former glory of DeFi? Syncus may be a potential solution.

About SyncusDAO

SyncusDAO

Syncus DAO is a decentralized currency reserve protocol deployed on the zkSync Era chain, focusing on the development and prosperity of DeFi applications within the zkSync ecosystem and providing liquidity markets for SYNC holders. Syncus aims to become the center of the zkSync DeFi ecosystem, a true decentralized "bank," offering customers lending, collateral, banking services, stablecoin services, interest rate accounts, mutual funds, brokerage, and exchange services.

ZkSync

In the DeFi space, zkSync Era serves as an Ethereum Layer 2 scaling solution, playing a crucial role in the development of the Ethereum ecosystem with its efficiency, low cost, and strong security. This provides a viable, high-performance platform for DeFi projects, and Syncus was born in this context.

How to better attract and utilize the over one billion dollars in liquidity currently on the Blast chain has become a question that all ambitious development teams in the crypto world must consider, and Zest has provided their solution.

Core Concept: Redefining Game Theory—How to Solve the Prisoner's Dilemma

The core concept of Syncus is to redefine the application of game theory in the DeFi space, aiming to break the zero-sum nature of other conventional protocols by designing a mechanism that transcends the prisoner's dilemma, thereby creating an ecosystem where all participants can benefit.

Defects in OlympusDAO's VE(3,3) Strategy

Before formally interpreting Syncus's proposed redefinition of game theory, let's first review the rise and fall of OlympusDAO. OlympusDAO is a groundbreaking project in the DeFi space, aiming to create a decentralized reserve currency protocol using its native token OHM. Through the innovative ve(3,3) model, Olympus rewards positive behaviors that benefit the collective and addresses the dilution of token holders' rights to some extent. However, the (3,3) strategy adopted by OlympusDAO, despite its innovation, has a fundamental flaw in its assumption that staking needs to be binding, which does not fully align with reality. In practice, there is a deviation between bond purchasing behavior in the market and the expected behavior of participants.

Syncus's Optimization Based on the VE(3,3) Model

Syncus's design philosophy is to create a mechanism where the actions of each participant promote the overall interests of the ecosystem, thereby transcending the traditional prisoner's dilemma. In this way, even in situations of potential competition or opposition among participants, the entire system can still achieve a win-win outcome. The strategy adopted by Syncus ensures that even seemingly detrimental actions to the system can still benefit the DAO and its long-term stakeholders (token holders). This mechanism is akin to a decentralized casino, where the DAO and its long-term participants always profit from the system.

Two-player Model and the Resilience of SYNC

In the Two-player Model within Syncus, any sale of SYNC results in a loss for the seller but benefits the stakeholders, ensuring the continuous flow of value for the DAO. Additionally, every transaction generates benefits for the DAO; even if the token price remains unchanged, the DAO profits by extracting a certain percentage of tax from each transaction. This mechanism attracts more participants, forming a self-sustaining ecological cycle. This model fundamentally differs from typical crypto Ponzi schemes or meme coins. Even if SYNC's activity diminishes, the remaining APY distribution can reignite interest, thus promoting a recovery cycle. For Syncus, a better chart should depict the actions taken by players and the outcomes for both the player and the DAO: In summary, Syncus aims to create a DeFi ecosystem that addresses the collective action problem caused by the prisoner's dilemma while ensuring mutual benefits for the DAO and its participants by cleverly leveraging game theory principles and implementing a series of innovative measures. In the following sections, we will detail the two main optimization measures implemented by Syncus.

SYNC Token Design

The token economic model of Syncus is a key component of its mechanism design. The governance token of Syncus, $SYNC, has a total supply of 4,186,731,698 SYNC. As of March 18, the price of SYNC was 0.03071, with a total market capitalization of approximately 130 million. These features ensure that the interests of token holders are closely linked to 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, where the token economic model evolves in sync with the development stage of its DeFi platform.

Innovative Strategic Optimizations of Syncus

Syncus's Adaptive Tax Strategy

The design of SyncusDAO considers the long-term sustainability and lifespan of its ecosystem. To achieve this goal, they have implemented a flexible tax system for sales and staking transactions. This approach ensures that Syncus can adapt to market fluctuations while maintaining stability and growth over time. Specifically, the Syncus protocol dynamically adjusts sales taxes and unstaking taxes based on market volatility. During significant price increases, Syncus temporarily raises the taxes on sales and staking transactions to reduce speculative trading and ensure the stability of the protocol. During stable market periods, 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 earnings received by stakers.

Syncus's Treasury-backed Token Mechanism

In addition to the innovative adaptive tax strategy, Syncus has introduced a unique mechanism aimed at providing sustained high APY by growing its treasury, thereby creating a new paradigm in the DeFi space. Syncus recognizes that before achieving significant market share, demand for SYNC will stem from the high APY it offers. To maintain and grow the APY, the core issue Syncus faces is how to grow the treasury. Learning from the experience of OlympusDAO, Syncus points out that while bond issuance can increase the treasury, it has a dilutive effect on holders, and removing bond issuance would make it difficult to maintain an attractively high yield. Moreover, early investment activities and liquidity provision cannot continuously provide sufficiently high 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 returns are generated for holders. This model design theoretically creates a self-growing flywheel effect, where Syncus captures the demand for SYNC and transforms it into treasury growth, creating a flywheel effect similar to OlympusDAO but more sustainable: High Yield -> More Demand -> Trading Volume -> Treasury Growth -> More Yield -> More Demand. This self-reinforcing cycle ensures that every token has real value.

Goals and Vision

Syncus positions its success metrics based on the benefits it brings to various stakeholders, creating maximum value for long-term holders of SYNC, rather than just the value of the token itself. This strategy ensures that regardless of market price fluctuations, participants can continuously receive returns and profits, advocating a success perspective that values sustainability. Syncus's short-term goal is to grow market share and create value for holders, while the long-term goal is to become a decentralized, treasury-backed protocol. Once a significant market capitalization is achieved, Syncus plans to invest in the zkSync ecosystem and build its product ecosystem, aiming to create a truly auto-generating yield stablecoin.

Conclusion

Syncus represents the arrival of a new era in DeFi, learning from past experiences and moving towards a more stable and sustainable future. By applying game theory, it transcends the traditional prisoner's dilemma model and proposes a model that is more beneficial to the DAO itself and its long-term stakeholders. Through the implementation of transaction taxes and treasury mechanisms, it encourages individuals to make positive contributions that ultimately benefit the collective, avoiding the trap of a death spiral. This innovative initiative by SyncusDAO not only brings new ideas to the DeFi space but also provides a solid theoretical foundation for its long-term development and sustainability. In summary, as more innovative DeFi projects emerge like mushrooms after rain, we can expect the market to regain confidence in the DeFi space, allowing it to seize opportunities in this bull market and lead the way.