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 QSD?
QSD is one of our flagship LSTs. It stands for Quant State Dollar, and has a dynamic price mechanism but a fixed APR.
That means that part of the yield is in Ethereum or stablecoin tokens, and the other part is made up of AQTIS tokens. The ‘q’ part is a reference to the AQTIS ecosystem and the unique quant tech that sits within it. Combined, QSD delivers a 15% annual yield to token holders.
What’s special about QSD is that each one generates a $0.15 USD yield. More on that below.
We have broken down the 15% APR into two different currencies: USDC and AQTIS:
- 12.5% APR in USDC.
- 2.5% APR 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 QSD have a dynamic price mechanism?
What’s unique about QSD is that it has two different yield mechanisms. The first is the underlying asset price. Once all 100 million QSD tokens have been minted, the token value is determined by the market, meaning the price of a QSD token can move above or below its initial $1 value.
The other unique feature of QSD is its APY. The QSD mint price is fixed at $1 USD, and the APY is at 15%. However, once the total number of QSD tokens has been minted (100 million), market forces come into play.
If for example, the market price of QSD falls below $1, the yield remains constant — $0.15 per QSD — but the relative APR would be higher. Let’s look at an example.
- The price of QSD falls to $0.70
- The yield remains constant — $0.15 per QSD.
- Because the price has dropped below mint value, but the yield per QSD stays the same, the equivalent APR works out to 21.43%
The same mechanism also applies when the price is above mint value. Let’s look at an example.
- The price of QSD rises to $3
- The yield remains constant — $0.15 per QSD.
- Because the price is above the market rate, but the yield per QSD stays the same, the equivalent APR works out at 5%.
Let’s explain this a bit more.
QSD has a price floor of $0.7 USD. But QSD has no cap on the upside, giving space for the market to determine a fair value. That means the market might decide that the yield QSD generates makes it worth more than the $1 minting price.
So while QSD is not a stablecoin, it has a controlled downside, along with strong market dynamics due to standardized APR in USDC, and uncapped upside. We believe that with time, the price of QSD will stabilize according to fair value.
How does it generate yield?
QSD accrues its yield from the AQTIS ecosystem. The APR for QSD sits in a smart contract and automatically adjusts to maintain the yield. The yield itself is backed by the yield generated in our quant tech. That means revenue generated by our quant strategies, helps AQTIS LSTs achieve its annual yield.
How do you get hold of QSD?
Users can swap ETH or USDC for QSD 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 QSD 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.
👉 Follow us on Twitter
👉 Join our Discord
Sign up for our AI Powered Newsletter
Would you like to better understand and eventually beat the markets?
AQTIS is delivering this institutional-grade Market Insights Newsletter straight into your inbox, for free! ▶️ Subscribe here!
That’s all for now. Stay tuned for more exciting updates, and we’ll catch you in the next one!
