FAQ

Below are some of the frequently asked questions we receive regarding ACYC - we aim to outline the answers to those here.

Q: Is there a tax on transfers of $ACYC?

A: Yes, any transfer of ACYC experiences the 3% sales tax coded into the contract! This is so people don't circumvent reflecting to other holders and filling the treasury with OTC sales. So if you want to move it elsewhere, you'll just need to take some time to reflect afterwards.

Q: If the Operators are talented at making money, why bother using ACYC rather than simply growing their own wealth?

A: By utilizing the ACYC protocol, succesful traders can bootstrap capital to trade with and share in the returns, while having basically no risk to themselves or their capital in the process. For traders who are illiquid, or simply want another avenue to profit from, this is an extremely attractive incentive.

Q: What happens if an Operator doesn't meet their Return Target for the Pond, or loses the money by trading unsuccesfully?

A: The answer here is simple: if a trader cant meet their Return Target, they can close the Pond and redistribute what remains according to the outlined structure pre-defined for their Pond. If they lose all the funds trading, then they lose the funds and there isn't a redistribution to be made.

Eventually when governance is introduced, Pond Contributors will have the means to elect or remove Pond Operators, even having the ability to force closure on a Pond for any number of reasons, should the vote pass through the governance.

Q: How to ensure that Operators don't run away with the Pond funds?

A: Initially, in earlier phases of ACYC's development, we will be internally selecting trustworthy Operators who we know will not do so. Later, Ponds can have mechanics introduced that limit certain abilities to transact in return for a higher "safety score". That said, there is no fool-proof way to ensure that this never happens - people can get creative with the ways with which they get funds.

Investing in individual trader Ponds comes with a level of risk that they will underperform/trade badly, or even potentially become malicious - that is simply the risk we take with each Contribution, and why buying $ACYC to act as an index for all the Ponds without being directly exposed to that risk is a viable option. By having a multitude of Ponds, we ensure resiliency for the entire protocol as one single bad-actor can do nothing more than affect their own Pond

Q: How do reflections work on a technical level, without needing staking or claiming?

A: Many smart contracts that operate tokens will store within the smart contract a balance of tokens for each address that holds the token. Then when a wallet, DEX, or any other system needs to understand that balance, the smart contract will look up the amount of tokens held by that address. However, ACYC’s contract operates differently. When the smart contract was deployed, the developer team created an impossibly large number (think the amount of atoms in the universe to the power of the amount of atoms in the universe), which is called the “total reflections”. When someone purchases $ACYC, our smart contract does not store the amount of tokens they purchased as many smart contracts do. Our smart contract stores the total tokens purchased multiplied by the ratio of the total tokens in circulation to the impossibly large number (which we call “total reflections”).

Then when a wallet, Uniswap, or any other system needs to understand an addresses’ balance we look up that saved amount of reflections for the address, and apply the ratio of the total tokens in circulation to the total reflections. In order to perform a “reflection” (either automatically or manually), what the smart contract will do is to take the amount of tokens to be reflected and it will apply the magic ratio of total tokens to total reflections. This will provide the amount of reflections to apply. Then it will subtract this number from the “total reflections” number. In turn what happens is that the magic ratio of total tokens to total reflections is altered such that everyone’s balance goes up by an amount proportional to their holdings at the time the reflections were applied!

The tokens in the liquidity pool will reflect, so the whole liquidity pool will get more $ACYC over time. But your percentage of the pool is what matters. If you have 1% of the pool and you withdraw you'll get 1% of the total tokens, which will include reflected tokens.

Q: How can I get involved with ACYC?

A: For now, until the first Ponds open, you can participate in the ACYC ecosystem simply by buying and holding $ACYC the token! We have a robust community that lives on Twitter & Telegram, feel free to hop in and hang with the other Reflectors!