We’re finally announcing the launch of Zircon Gamma, our canary deployment on the Moonriver network!

Zircon is a DEX that features our unique Zircon Pylon system, which allows you to supply liquidity with one token and greatly reduce your impermanent loss.

The launch comes together with our token, ZRG. Liquidity mining has begun with the #ZRGRush campaign. About half of the supply will be distributed through farming, which can be accessed by providing liquidity to our single-sided pools.

Zircon has been audited by Chaintroopers, a firm active in the Moonbeam/Polkadot ecosystem. Zircon Gamma has been launched in stealth for two weeks, which allowed us to monitor the system and refine many aspects. It is now ready to be used in full!

Head over to app.zircon.finance if you’re itching to ape in.

If not, read on to learn more about how it works.

How Zircon Works 

We know that solving impermanent loss is a meme. Everyone claims they do it, but somehow you’re still suffering from it.

We started designing Zircon as just a single-token staking DEX, but we eventually realized that the mechanism we chose was a lot more interesting than it seemed.

Zircon Pylon allows liquidity providers to supply liquidity with one token to each pair. Taking an ETH/USDC pool as an example, Zircon’s single sided system separates it into two sides called Float (ETH) and Stable (USDC). 

ETH Float LPs take all the gains and losses of the ETH in the pool, while USDC Stable LPs can remain safe in their stablecoin. Both sides earn swap fees.

With pure single-sided liquidity, Float LPs double their gains over regular DEX pools, but still suffer impermanent loss. We think this is already great on its own, since we separate the risks and allow stablecoin LPs to co-exist with volatile token LPs.

Stablecoin pairs are important, since traders prefer them when they’re available. We see that from how centralized exchanges have the most volume with stablecoins.

Reducing impermanent loss

What really makes Pylon an anti-impermanent loss solution is a mechanism called Async LPing. 

With this mechanism, Pylon treats a combination of ETH and USDC as if it was all USDC. You can supply a 50/50 split of the two tokens as a Stable LP, and join the pool as if you only had USDC to begin with.

The system writes down how much your liquidity is worth in USD when joining, and lets you withdraw only the equivalent USD amount in the future. But the ETH they supplied stays in the pool, and the future gains from it go to the Float LPs, reducing their impermanent loss.

The same logic applies to supplying Float liquidity as Async. Float and Stable vaults are always some percentage of the value of the pool: the goal of the protocol is to keep that percentage as close to 50% as possible.

This is where the yield from swap fees come into play. Pylon assigns more fees to the weaker side. For example, if Float LPs control 70% of the pool, Stable LPs will get 70% of the fees.

If LPs supply/remove liquidity so perfectly that the weights are always at 50%, there’d be zero impermanent loss in Zircon. In practice nothing is perfect, so there will be some impermanent loss for Float. But it’s likely to be >90% less than what you’re used to, especially over long time horizons.

You can read more about Zircon Pylon in our Docs.

ZRG Token launch

Zircon Gamma is the fair launch version of Zircon, designed to be a safe space for degens to use the system and learn all of its powerful features. Together with the release of the platform, we are releasing the ZRG token, designed to give governance control over the protocol. For this reason, it’s important to achieve an equitable and fair distribution.

Up to 50% of the ZRG supply will be allocated for a liquidity program  expected to last 2 years. There is almost no insider allocation except for a 5% reserved for development. The launch comes ahead of the main network launch on Moonbeam, expected by the end of the year. You can read more about ZRG in our tokenomics post.

Head over to our Farm tab to check out the menu!