Solana-based DeFi platform Cyclos has raised $2.1 million in its latest funding round. The project plans to use the capital to create the first concentrated liquidity automated market maker (AMM) on Solana, enabling a host of features never before seen in the blockchain’s ecosystem.
The private funding round saw participation from a succession of noteworthy investors including CMS Holdings, Hashkey, Solana Capital, Huobi Ventures, Coin98 Ventures, MXC, MarketAcross, and Gate.io. Additional investment came from Skyvision Capital, Petrock Capital, Illusionist Group, Cryptomeria Capital, DigiStrats, and Youbi Capital.
“We’re excited to fully begin the Cyclos journey with the strong backing we received,” enthused Jason O’Brien, a spokesperson for Cyclos.
“Cyclos introduces a myriad of functionalities to DeFi on Solana that, until now, were not possible with existing infrastructure. Range-limit orders, capital efficient liquidity pool bootstrapping, and orderbook-based stable asset market making are all possible due to Cyclos’ innovative approach to concentrating liquidity providers’ assets.”
Cyclos offers a unique spin on the concept of concentrated liquidity first pioneered by Uniswap V3. By utilizing Solana and its low-latency, high throughput blockchain, the platform facilitates the creation of concentrated liquidity tethered to Serum, an orderbook-based decentralized exchange (DEX). In doing so, it purports to provide all the benefits intrinsic to concentrated liquidity with few of the downsides.
Funds committed to Cyclos are used to provide liquidity on Serum DEX according to ranges specified by LPs. Using Serum obviates the need to bootstrap volume and initial liquidity for the AMM pools, reducing impermanent loss risk for new pairs and immediately guaranteeing income for LPs.
Cyclos is particularly advantageous for stablecoin pairs, since markets can be made without the use of algorithms. The platform also enables features such as range orders and stop loss/limit orders, which were previously unavailable on Solana AMMs.
“CMS is excited to support Cyclos in their mission to bring concentrated liquidity to Solana,” said Dan Matuszewski, Partner at CMS Holdings. “The growing Solana user base has increased the demand for a world-class AMM experience. The Cyclos team is strong and well positioned to have a material impact on advancing Solana’s DeFi ecosystem.”