1、The current development and demands of the DeFi industry

（1）The core market demand that Cicada aims to address

Cicada addresses the critical need for platform providers in the market to deliver authentic returns and sustainably enhance interest rates. The current market faces the following challenges:

1. Lack of Genuine Returns: Most purported "returns" in the market stem from token inflation or Ponzi schemes, unsupported by tangible value.
2. Inequitable Income Distribution: The revenue generated by many projects is disconnected from token holders. Dividend models lead to capital outflows, while repurchase models, though supportive of token price and deflation, fail to enhance the token's portfolio attributes.
3. Liquidity Constraints: Traditional DeFi protocols require users to lock assets to generate returns, compromising liquidity. Liquidity mining models, intended to incentivize liquidity provision, often lead to a death spiral of declining token prices and liquidity exhaustion when unsupported by real income.
4. Sustainability Challenges: Projects relying on non-substantive assets as collateral thrive only in bullish markets and are prone to collapse during bearish conditions.
   By addressing these issues, Cicada aims to foster a more robust and sustainable ecosystem for stakeholders.

（2）The sustainable returns of RWA assets are crucial to market development

Market Challenges and Unsustainable Practices:
The cryptocurrency market grapples with systemic issues that undermine its long-term viability:
Unsustainable High APYs: Many projects advertise elevated Annual Percentage Yields (APYs) driven by subsidies, Ponzi-like structures, or short-term capital maneuvers, rather than genuine, value-backed returns.
Prevailing Models

• "Void Pledge": Returns are generated from subsequent investors’ funds, lacking the support of underlying assets, creating an unstable financial foundation.
• "Subsidized APY": Projects rely on finite financing or ecosystem funds to inflate short-term returns, a practice that is inherently unsustainable.
• "One-Wave Flow" Strategy: In bull markets, projects attract capital with high returns, but in bear markets, they collapse, resulting in significant losses to users’ principal.

Comparison with Traditional Finance: Elite Wall Street funds achieve annualized returns exceeding 20% with Sharpe ratios above 3.5, representing top-tier performance. In contrast, many crypto projects tout APYs far beyond these benchmarks, signaling clear unsustainability.
Industry Turning Point: The crypto industry’s growth curve, driven by dissemination and consensus, is approaching or has reached a critical inflection point. Without sustainable returns anchored in Real-World Assets (RWAs), the sector risks becoming an unstable, rootless entity, detached from enduring value.
Addressing these challenges requires a shift toward transparent, asset-backed models to ensure the industry’s long-term stability and credibility.

（3）The market requires the LYD (Liquid Yield Derivatives) mechanism

1. In contrast, traditional finance benchmarks, such as top Wall Street funds, achieve annualized returns exceeding 20% with Sharpe ratios above 3.5, representing peak performance. Crypto projects advertising significantly higher APYs are often unsustainable and prone to collapse.
2. LYD’s Commitment to Sustainable Returns
   LYD prioritizes long-term, authentic returns over short-term, speculative APYs by focusing on:
   （1）Genuine Revenue Sources: Leveraging Real-World Assets (RWA), onchain protocol revenues, and professional Centralized Finance (CeFi) strategies.
   （2）Stable, Risk-Controlled Returns: Emphasizing consistent performance over volatile, high-risk digital schemes.
   （3）Long-Term Asset Management: Ensuring verifiable, sustainable returns through robust and transparent processes.
3. Objective: To establish a platform that delivers stable, incremental returns, distinct from speculative products reliant on market sentiment.
4. Criteria for Identifying High-Quality Yield Platforms
   Investors should exercise caution when evaluating platforms, focusing on:
   （1）Scrutiny of High-APY Claims: Distinguish whether returns are derived from tangible assets or speculative capital pool models.
   （2）Prioritizing Sustainability: Opt for platforms with transparent, auditable, and risk-controlled return mechanisms over those chasing short-term gains.
5. Our Positioning: LYD avoids fleeting, high-risk projects. Instead, we cultivate enduring competitiveness through professional asset management and real-world asset integration, fostering trust and reliability.
   Summary
   Cicada distinguishes itself from transient, high-APY crypto projects by emphasizing authentic returns, institutional-grade risk management, and long-term sustainability. Our approach is designed to attract discerning users and investors who value stability and genuine value creation.