QuantBonds

Taking part in QuantDAO's operations using QuantBonds (QBs) is a straightforward way for holders or non-holders to piggyback on the DAO's actions with somewhat indirect participation. While the issuance of QBs in excess can result in an inflationary effect, increasing the supply of $QD in extreme scenarios can be beneficial to overall DAO health.

QBs work like any other bonds, whereby a fixed interest rate is paid to the lender (buyer) upon bond maturity. QBs are usually very helpful to the DAO's mission of $QD recapture and can generally be seen as a tool for the DAO to collect more actionable liquidity.​

Pros and cons of bonds within the QuantDAO protocol

QBs offer a special case for participation in the QuantDAO strategy, whereby those buying bonds have an opportunity to profit by at least 2.5% per cycle (week), where balances are repaid in $USDC. Excess amount owed is paid in market-rate $QD.

In most scenarios, the deflationary effect for the weekly cycle is positive, where only extreme loss periods are capable of contributing to inflation. Even so, given the probability that most cycles will contribute to deflationary pressure, over time, any inflationary events should remain subtle.

It is important to note, to trigger inflation, bonds had to have been purchased paired with significant loss, which likely may not regularly (if ever) present itself. As such, these inflationary events may become increasingly unlikely as the DAO becomes more forward looking, and, for example, utilizes stablecoins as an investment vehicle during macroeconomic downturns.​

Calculator

A spreadsheet can be found here as 'QuantCalc' to perform exploratory calculations.

Within sheet "Calculator" or "ETH Calculator" -- only Tax Pool, Bonds Issued, Bond rate, ETH price, and ROI may be changed.