Welcome to AQTIS Explains. This is a new series where we explain the key parts of the AQTIS ecosystem in simple terms so you can get to grips with the different parts that make up the AQTIS world, in just a few minutes.
What are LSTs?
At the core of AQTIS are our LSTs, or liquid staking tokens. LSTs are at their simplest, tokens that represent tokens committed to a protocol.
They are generally tokenized IOUs that are issued for staking ETH through a liquid staking platform. So when you stake ETH through a liquid staking provider, you deposit some amount of ETH on the platform and in exchange receive special tokens that match the value of your deposit.
AQTIS has built its LSTs differently. We are not a derivative or an IOU. AQTIS LSTs have a value of their own that users buy and own. Instead, these LSTs provide special access to the AQTIS protocol: the gateway to our quant technology.
You can find a deep dive into our quant tech here. But for this piece, an AQTIS LST is a token that generates a yield, that goes directly into your wallet.
What are AQTIS LSTs?
AQTIS has developed three unique LSTs with different reward mechanisms. Each one provides yield, but its makeup differs. We’ll explore what the yield is for qETH later.
But for now, all you need to know is when you buy an AQTIS LST, it generates a yield in tokens. AQTIS LSTs are unique in the DeFi space as they do not depend on a third party to generate a yield.
With AQTIS, the yield comes from being part of the AQTIS ecosystem. Inside the ecosystem, there are several unique features that create yield. One of those is our quant tech.
AQTIS Quant Tech is a unique set of models we have built that uses Quantitative analysis, or QA to help inform when to enter and exit certain trades. These models are then backtested and optimized.
This technology has historically only been available to financial institutions. We believe it should be accessible to everybody. You can find out more about our Quant Tech here.
What is QRT?
QRT is one of our flagship LSTs. Quant Reserve Token, or QRT for short, is an exotic LST with a yield mechanism that dynamically reacts to market conditions to create a number of unique features not found in other LSTs. The ‘q’ part is a reference to the AQTIS ecosystem, and the unique quant tech that sits within it.
What’s special about QRT is that its yield dynamically adjusts to how popular the LST is. The result? A token with a 15% APY in ETH and USDC plus a 2.5% bonus in AQTIS tokens, for a combined 17.5% APY.
We have broken down the 17.5% APY into three different currencies: ETH, USDC and AQTIS:
- 7.5% in ETH
- 7.5% in USDC
- 2.5% APY in AQTIS tokens.
Disclaimer: Percentage yields are a guide, not a guarantee. The performance of AQTIS LSTs can vary, as can the percentage yield.
Why does QRT have a dynamic price mechanism?
While the yield for QRT is set at mint, the value of that yield can fluctuate, because of its unique rewarding mechanism.
Let’s take a look at an example:
At launch, 10 million QRT tokens are minted at a price of $10 USD per QRT.
With an APY of 15% in native assets, this translates to $15 million USD in ETH & USDC is allocated as rewards to holders per year.
If 90% of these tokens (or 9 million QRT) were minted by users but sold back into the open market, it means the remaining 10% of token holders will claim the entire $15 million in rewards.
In summary: The QRT token is designed to deliver rewards, irrespective of how big or small the user base is. If users begin to exit the token, the yield is distributed among a smaller group of people.
So while the QRT token price might decrease, users benefit from a substantially higher yield.
The rewards stay. Whatever the weather.
Securing the quant tech
QRT is 50% paired with ETH and 50% with USDC, but it isn’t pegged to either. This means that if users exit, a portion of the liquidity in the quant tech remains unbothered and continues generating yield. QRT holders can easily sell tokens without friction.
So regardless of the number of users, the liquidity generated in minting QRT keeps on being used in our quant tech. This means that it doesn’t matter how many people are holding QRT. Whether all QRT are sold, or whether it’s only 90%, or even 10% users, the users holding get the full portion of the yield.
Next to QRT being minted at $10 per piece, as 50% of the liquidity of QRT is paired with ETH, token holders might enjoy 50% of ETH upside as well, pushing the QRT price beyond $10. While on the other hand, if ETH would go down in price, due to being paired with USDC, QRT price would remain more stable than ETH.
QRT has the best of both worlds.
How does it generate yield?
QSD accrues its yield from the AQTIS ecosystem. The APY for QRT sits in a smart contract, and automatically adjusts to maintain the yield. The yield itself is backed by the AQTIS ecosystem and our quant tech. That means revenue generated by our quant strategies, helps AQTIS LSTs achieve its annual yield.
How do you get hold of QRT and take advantage of the yield?
Users can swap ETH or USDC for QRT by using the AQTIS dApp which will be released on April 17 2024.
The beauty of the AQTIS LST is that you don’t have to do anything. Simply hold your QRT in your non-custodial ERC-20 compatible wallet, and the tokens will generate yield on their own.
Once yield has been accrued, users can effortlessly claim it via the AQTIS app without any need for staking or locking their assets.
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That’s all for now. Stay tuned for more exciting updates, and we’ll catch you in the next one!
