TL;DR: This article lays out how you can influence the addition of new collaterals to borrow MAI. It also covers possible incentives for borrowing MAI and debt ceiling schedules.
Qi holders have helped guide the project from the start, from black swan events to price upswings. We’ve grown through it all by listening to the community and holding votes. Today, we’re calling on all Qimps and Qildrens. We need you to decide which token will join QiDao as our next collateral.
Adding new collaterals
QiDao will release weekly QIPs (improvement proposals) to vote on the next collateral token, to be launched the following week. Voting power, referred to as Qi Powah, comes from the amount of Qi users hold. The more Qi Powah a user has the more voting power they receive. Users can increase their Qi Powah by locking their Qi up to 4 years in escrow to increase their voting power by up to 4x. To learn more about increasing Qi Powah checkout our Medium article.
Incentives will be voted on by the community through a QiDao Improvement Proposal. Below are some ideas for how we envision vault incentives.
Users will be rewarded for opening vaults and borrowing MAI (eligible vaults will need to have borrowed MAI). These rewards will come in the form of Qi (0.1 Qi per block per collateral type). These incentives will transform QiDao vaults from being 0% loans to negative interest loans (getting paid to take loans). Users would get rewarded based on the amount of the MAI they borrow through a specific collateral type. For example, if a user minted 10% of the MAI attributed to WETH collateral, they would receive 10% of the 0.1 Qi / block rewards for that vault type.
Vaults with yield-bearing assets would receive half incentives (0.05 QI / block).
There’s a limit to how much MAI there can be and it’s called a debt ceiling. Each collateral type has an individual limit. For example, if the debt ceiling for Matic is 1 million, all Matic vaults can borrow up to 1 million MAI in aggregate.
When a new collateral type is added to the protocol, the corresponding vault type will have a debt ceiling of 100,000 MAI. This will reward early users, given that vault rewards will be 0.1 Qi per block from launch. As a result, early vault owners will receive higher APRs than late-comers. The debt ceiling increase schedule is summarized by the table below:
Yearly APR calculations for 0.1 QI emissions
- Early vault owners (100,000 MAI): 2,742% Yearly APR
- First increase (600,000 MAI): 457% Yearly APR
- Second increase (1,600,000 MAI): 171% Yearly APR
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