Staking and Revenue Share

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

• (1) 100% of the period's sell taxes collected is awarded to stakers in the form of $QD, automatically sent to the staking contract and initialized in a decentralized fashion.

• (2) In a typical period (after bonds are implemented), 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.

  • Before the release of bonds, a community vote will be performed as to whether the 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 rewards to avoid minting to satisfy bonds, lending greater safety to the DAO.

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
• Remainder of $28,300 is invested, and earns +8%, totaling $30,736.80

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

• Bonds are repaid first to 10,250 $USDC, leaving $20,486.80 (in $ETH) to buy $QD at market rate.

• Current cycle 'bonus' payouts of $275 and $845.26 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 $19,366.54 of market-rate $QD is burned

• Stakers benefit from the standard sell-tax revenues, bonuses, and indirect buyback value increase.