Is Gyroscope Safe?
Risk Grade: B- (34/100)
Gyroscope is rated as moderate risk — some novel mechanisms, generally well-understood.
Moderate risk — clever anti-bank-run design but novel mechanisms at $22M scale have not been battle-tested
A stablecoin (GYD) designed to survive multiple types of failures by holding a diversified basket of DeFi assets and using a novel anti-bank-run pricing mechanism. It has $22M in market cap with $4.5M in funding. Its C+ grade reflects untested novel mechanisms operating at small scale.
TVL
$2M
Mechanisms
7
Interactions
5
Value Grade
C
Key Risks for Gyroscope Users
During a crisis, the protocol deliberately reduces the amount you get back for each GYD below $1 to slow panic selling. You take a guaranteed loss to prevent a bigger collapse
Trading pools use a novel elliptical curve shape. If GYD's price moves outside the curve's range, all trading liquidity vanishes at once and you cannot sell
The reserve holds multiple DeFi tokens. If several of these fail at the same time (which happens during market crashes), the backing for GYD erodes from multiple directions
Top Risk Factors
- •PAMM algorithmic redemption reduces GYD exit value below $1 during reserve stress, deliberately penalizing early redeemers
- •E-CLP concentrated liquidity pools can lose all active liquidity if GYD price moves outside calibrated elliptical ranges
- •Reserve diversification depends on the health of constituent DeFi assets; correlated failures could drain the reserve simultaneously
How Gyroscope Compares to Peers
Gyroscope ranks #5 of 29 Stablecoin protocols (top quartile — safer than most). At a risk score of 34/100, it's 9 points safer than the sector average of 43/100.
Adjacent peers: Reserve Protocol (B-, 33/100) is ranked just safer, and Liquity V2 (B-, 34/100) is ranked just riskier.
See the full Stablecoin sector leaderboard or the Gyroscope vs Liquity V2 comparison.
Common Questions about Gyroscope
Plain-English answers based on Gyroscope's scores across Hindenrank's 8 risk dimensions. The highest-scoring (riskiest) dimension is Vitality Risk (8/10).
Has Gyroscope ever been hacked or exploited?
Gyroscope has a fairly clean operational history. The track record dimension scored 1/15, indicating minor or no significant incidents on record. A clean track record is a positive signal but it does not guarantee future safety, especially as protocol complexity grows.
How much money is at stake in Gyroscope?
Gyroscope currently holds under $2M in user deposits — small enough that liquidity events could affect exits. Smaller TVL means individual depositors carry a larger share of any loss event, and it can be harder to exit a position quickly during stress.
What's the worst-case scenario for Gyroscope?
Hindenrank has identified specific collapse scenarios for Gyroscope. The most prominent: "Reserve Asset Contagion Cascade". The trigger condition is One or more reserve assets (stablecoins or yield-bearing tokens) depeg or suffer an exploit, dropping the reserve ratio below 100%. Reading through the full scenario list on the protocol page is the single best way to understand the actual failure modes — generic "smart contract risk" is rarely the thing that takes a protocol down.
Is Gyroscope regulated or insured?
Gyroscope has low regulatory exposure on Hindenrank's framework (3/10). The protocol is structured in a way that minimizes counterparty and jurisdiction concentration, though regulatory risk in crypto can change rapidly. No DeFi protocol carries FDIC-style insurance — even with low regulatory risk, depositors are not protected in the way bank customers are.
What are the biggest red flags for Gyroscope?
Hindenrank's retail-focused risk audit flagged: During a crisis, the protocol deliberately reduces the amount you get back for each GYD below $1 to slow panic selling. You take a guaranteed loss to prevent a bigger collapse Trading pools use a novel elliptical curve shape. If GYD's price moves outside the curve's range, all trading liquidity vanishes at once and you cannot sell The reserve holds multiple DeFi tokens. If several of these fail at the same time (which happens during market crashes), the backing for GYD erodes from multiple directions
Should beginners deposit into Gyroscope?
Gyroscope is rated B-, which is acceptable for users who understand the protocol's mechanism. Beginners should read the full risk breakdown and only deposit after they can articulate the top three failure modes. If you cannot explain how the protocol works, do not deposit.
How does Gyroscope compare to safer Stablecoin alternatives?
Gyroscope is one protocol in Hindenrank's Stablecoin coverage. The safest Stablecoin protocols on the leaderboard tend to share three traits: a long incident-free track record, conservative mechanism design, and high-quality public documentation. Compare Gyroscope against the full Stablecoin ranking before committing capital.
For the full 8-dimension score breakdown, the radar chart, and dependency graph, see the Gyroscope risk report.
Read the Full Gyroscope Risk Report
This protocol has 2 collapse scenarios. 3 high-severity interaction risks identified. See the full mechanism classification, interaction matrix, and deep-dive recommendations.
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