What is Zircon Pylon
Zircon Pylon is the name of the technology used in the Zircon exchange that allows it to reduce impermanent loss, increase liquidity for trading, and let users choose the risk they want when supplying liquidity to earn rewards.
Everything starts with liquidity pools. Like on most other exchanges and AMMs, Zircon has trading pairs composed of two tokens: ETH/USDC, ETH/BTC, ZRG/ETH and so on. In fact, nothing has changed on this layer of the platform, as the pools work almost exactly like on Uniswap V2 and its forks (which includes PancakeSwap, Sushi and others).
Zircon Pylon is the liquidity management system that splits the pool into two sides: Float and Stable. Each represents a specific token in the pair, and they also represent different types of risk you can take.
Both Float and Stable LPs offer single-sided exposure even when inside the pool. Meaning, if you add USD, your claim will be entirely denominated in USD. If you add ETH, you will only claim the ETH portion of the pool (simplified a bit — in practice your portfolio is a dynamic mix of ETH and USD that tracks ETH's price changes in full).
The system also offers flexibility in dealing with impermanent loss, and uses an incentive-based mechanism to hedge its liability.
While the Pylon is permissionless and you can create whatever combinations of tokens you want, there are some guidelines for which tokens should be Float and which should be Stables.
As the name hints, the best Stable is a Stablecoin. The Pylon was primarily designed to allow stablecoin holders to put their assets to work with regular trading pairs, which generate more fees than Curve-style pools of different stablecoin wrappers. So if you have stablecoins, Stable is the only choice.
In pairs without stablecoins, the Stable side should be the least volatile token in it. For example, ETH would be a Float in the ETH/USDC pair, but a Stable in the ZRG/ETH pair.
Finally for volatile tokens like ZRG, or many of the other tokens listed on Zircon, Float is the only reasonable choice.
Choosing the specific coin and vault type will depend on a large number of factors, such as APRs, market volatility, and specific indicators on the Pylon. In the next section, we will explain all the tools you can use to make an informed choice.