Cytus, a protocol designed by Robinland, is set to go live for the public on October 1st
After nearly 3 months of development, Cytus Protocol is finally ready to go live with the release of its first public investment project. The investment opportunity will go live at 6:00 AM GMT / 2:00 AM EST to anyone with an identification outside of the United States. The project is a real estate construction loan in Brooklyn, New York with details below.
The loan is a part of a series of loans underwritten by Robinland, the first of which (also $250k in size) is already sold out as of Sept 2022. This piece is the second $250k portion of the total $750k planned to be crowdfunded by Robinland.
With unprecedented interest rate hikes, crypto investors are beginning to look at off-chain assets as stronger yield providers. The 1 year U.S treasury rate is well over 4%, while the risk free yield farming rates in DeFi for protocols like Aave and Compound are less than 1%.
Cytus is here to provide a platform for crypto investors to access high and sustainable yield from off-chain assets without having to off-ramp their stablecoins. Cytus, together with its partner company Robinland, provides a suite of technical and legal solutions to tokenize high-quality off-chain debts and provide fixed income blockchain has not seen before.
Cytus: A Part of Robinland
Robinland’s mission of “Unlocking Commercial Real Estate” stems from the monopoly large financial institutions in the U.S hold on U.S real estate debt. Robinland was created to allow anyone to invest in commercial real estate debt in small pieces for the first time. But with SEC regulations, the Robinland platform in the short term requires investors to be accredited and a U.S Citizen.
Cytus was created to allow anyone outside of the U.S to participate in investment-grade U.S commercial real estate debt via the DeFi ecosystem. All that is required is a simple identification of a country or region outside of the U.S.
What’s next? Roadmap of 4 Launch Stages
The current launch is our first step in launching the fully functional DeFi protocol we envision.
Stage 0: Launching 10/1 — Fixed-Term Investment
Investors can deposit USDC into Cytus Protocol to receive loan-backed-tokens, which are a representation of their ownership in the off-chain assets and deliver streams of returns in stablecoins linearly.
When a particular project funding goal is met, the pool will not accept new capital inflow. When using this pool, users will need to lock their capital for a certain period of time. Because the pool is just enough money to finance the loan, selling your tokens back to Robinland is possible, but comes with a penalty. Penalties are structured to decrease linearly over time. In month one, the penalty is 12% on the principle if the tokens are sold back to Cytus, decreasing 1% each month (in month 12, the selling penalty is 1%.) for a 1-year debt.
The advantage of this design is that investors can reach higher capital efficiency because the capital utilization rate is always 100%. The disadvantage is that investors have to lock their capital for a certain period of time without taking a penalty.
Stage 1 — Dynamic Interest-Adjusted Pool
At this stage we will be launching a new type of pool with TVL auto-balanced by interest rate. To launch such a pool, there will be a fundraising period where the funds are raised. The total amount raised has to be higher than a certain threshold for the pool to be deployed into the actual off-chain asset. After the pool is launched, investors who missed the launching period still have the opportunity to invest into the pool. The new inflow will dilute the interest distribution but it will also serve as a liquidity buffer. As long as the capital in the pool is larger than the amount borrowed in the off-chain asset, investors are able to withdraw their capital freely.
For instance, an entity is trying to borrow 20M with 10% APR using our protocol. Once the funding goal of 20M is reached, the pool can be deployed successfully. Assume that after deployment, new investors invested a total of 20M more into the pool. Now the pool has 40M in total, which brings the APR down from 10% to 5%. As interest goes down, some investors might want to leave the pool. Let’s say 10M capital is withdrawn from the pool, then the pool has 30M in total, which translates to 6.6% APR. The demand and supply will adjust the interest rate accordingly.
The advantage of this type of pool is that investors have liquidity most of the time. They can withdraw their investment as long as there are extra funds available. But the disadvantage is that the capital utilization rate is below 100%, meaning that some of the funds are not put into use and earn interest.
Assets Planned to Launch by Stage
For more information: