Staking and Revenue Share

The QuantDAO protocol supports stakers with two sources of $QD for earnings, (1) from a portion of pre-investment tax pool and (2) through excessive profit earned by the cycle, neither of which contribute to inflationary pressure.

• (1) 10% of the pre-investment period collected tax fund is awarded to stakers in the form of $QD, attained through buybacks prior to asset purchase and buyback execution.

  • Before the release of bonds, a community vote will be performed as to whether the 10% reserved for staking rewards should be used as an underlying buffer towards mitigating bonds' losses. If passed, the staking rewards would be held in escrow and awarded after the cycle is complete. This allows the staking reward to further reduce the incidence of minting to satisfy bonds, also allows for it to increase in value.

• (2) In a typical period, when the investment cycle earns more than 2.5% but less than +5%, bonds are repaid to 102.5% of the bond value, where excess is kept for buyback and burning. When the investment cycle earns more than +5%, bonds are repaid appropriately and excess is split between stakers and bond holders as a bonus in the form of recaptured $QD.

In order to receive staking benefits, one must be staked prior to voting close.

Users must remain staked throughout the following voting period. As such, the user effectively held the voted asset with the DAO, and is thus allowed the bonus payment if eligible.

Bonuses are capped at 50% of the final cycle balance, thereby preserving the thesis of being able to still burn $QD for each cycle. Excess of this erodes the ability for effective buyback. See the Google Sheet for calculations.

Note in this scenario, where the weekly cycle ROI is 1,000% (10x), the bonus rate would theoretically climb to 488%, which would of course erode the cycle balance. By capping the maximum bonus return rate, bonds receive an additional $5,000, stakers earn an additional $135,500, and $120,250 remains for burn, preserving benefits to both the core thesis/token holders.

Alternatively, under a 108% ROI (+8%), during a cycle where $20,000 of weekly tax revenue has been generated, and $10,000 of bonds have been issued at a 2.5% return rate;

• 3% saved for gas reserves (1.5%, unused is rolled over into the next cycle) and minor routine costs (1.5%, salary for moderators, ongoing social media subscriptions, web server, etc)

• 0.20 ETH awarded to participation winners

• $2,000 worth of market-rate $QD is awarded to past-cycle stakers

• Remainder of $26,300 is invested, and earns +8%, totaling $28,404

• Asset is sold for $ETH, then used for needed $USDC to repay bonds

• Bonds are repaid first to 10,250 $USDC, leaving $18,154 (in $ETH) to buy $QD at market rate.

• Current cycle 'bonus' payouts of $275 and $781.11 of market rate $QD is redeemed by bond holders and stakers, respectively

  • Bond rate effectively became 5.25%

  • Stakers receive 2.75% from the buyback total

• The remaining $17,097.89 of market-rate $QD is burned

• Stakers participating in both cycle periods earn $2,781.11 over the week, with deflationary benefits

Full qualification of rewards requires staking of $QD through an entire asset cycle to receive both rewards; $QD must be staked prior to the closure of an asset vote, where earnings are realized after the close of the following asset vote.

In order to qualify for rewards (tax pool and potential asset bonus), participants must begin staking prior to the close of a week's voting period and remain so until the next week's voting period is complete/voted asset is sold.