QiDao has created a first of its kind program, powered by UMA smart contracts, to align incentives between strategic partners. Strategic partners can purchase Qi Sucess Options whereby they are increasingly rewarded for actions that increase QiDao’s Total Value Borrowed (TVB).
QiDao Launches Strategic Partner Program
On November 5th 2021, the QiDao community voted to approve QIP036: Approving Standards for Strategic Partnerships. With the help of UMA’s contracts, QiDao is excited to launch the Success Option program and have its community accept partner proposals to access up to 4.8M in Qi Tokens.
Potential partners include venture funds, partner protocols, even individuals. Proposals can be submitted to QiDao for community whitelisting with the aim of supporting QiDao’s TVB, through mutually aligned outcomes. Whitelisted partners can purchase Qi Success Options, which unlock more Qi as more MAI is borrowed from the protocol. Partners will see an increase in the potential redemption amount of Qi tokens, thus incentivising continued alignment and potential further growth across the tenor of the partnership.
Qi holders & Stakers
Qi holders will vote on submitted proposals to whitelist partners that are best suited for the program and its goal to increase TVB. The QiDao community will benefit from increased potential revenue from repayments fees as more MAI is borrowed. This can additionally draw further interest from users and protocols to purchase and stake Qi for a share of this growing revenue.
With incentives aligned with the amount of MAI borrowed, this encourages partners to create new use cases, yield opportunities, and sinks for the MAI stablecoin. The goal is for strategic partners to help power MAIs growth and adoptions across the DeFi ecosystem. This will ensure QiDao remains the best source to unlock the value of one’s crypto with 0% interest borrowing across multiple chains.
Aligned Incentives Leading to Mutual Growth
Success Options are reward tokens created through UMA’s Long Short Pair (LSP) smart contract template and secured by its Optimistic Oracle. Combined they are able to resolve the value of the token based on predetermined parameters.
Essentially the Success Options will pay out more of QiDao’s governance token Qi at redemption, as QiDao’s Total Value Borrowed hits specific milestones before the specified expiry. These KPI Options tokens will have a minimum value of 1 Qi each — but as more milestones are hit, they will pay out Qi in proportion to the milestones being met (up to 2 Qi).
Thanks to the easy-to-use UMA financial contract templates, it is now simple for potential QiDao partners to gain access to the tranche of Qi tokens set aside for developing and growing QiDao through partnerships. Additionally, all participants in this program can rely on the security of UMA’s DVM that is part of the Optimistic Oracle, ensuring a transparent and trustless program that benefits all involved.
QiDao has set aside 4.8M Qi for this purpose under the tokenomics framework. The target tenor of this program is 18 months, with the option for partners to roll over their Success Options for an additional 18 months after expiry, to achieve extended milestones and higher payout.
The milestones that have been defined for the program available for purchase by partners would follow the outline below:
How would this work for Protocol A desiring to become a Strategic Partner?
Protocol A, which is a DEX, submits a proposal to supply initial liquidity to a new MAI-ProtocolAToken pair, and incentivise it with their Token. The protocol proposes to purchase 500,000 Qi Success Options.
Once whitelisted through a governance vote for the specified amount of Success Options, Partner A would purchase the Qi Success Options and begin the incentivised liquidity mining program (LMP) defined in the proposal. They may also choose to market the partnership, LMP program and benefit from their protocol increasing QiDao’s TVB.
When Milestone 1 is achieved the redemption amount of the 500,000 Qi Success Options owned by Partner A would be 500,000 x 1.13 Qi = 565,000 Qi Tokens
When Milestone 2 is achieved the redemption amount of the 500,000 Qi Success Options owned by Partner A would be 500,000 x 1.27 Qi = 636,000 Qi Tokens
If after 18 months, at the expiry of the program, Milestone 5 has been achieved of 7,500,000,000 MAI borrowed, the 500,000 Qi Success Options owned by Partner A would be 500,000 x 2 = 1,000,000 Qi Tokens
The partner may then redeem the Qi Success Options or choose to roll over the Success Options for an additional 18 months for extended milestones and increased payout.
This strategic partner program therefore benefits all partner protocols that are bought-in, aligning them to engage in efforts to increase QiDao’s TVB and ensure that their potential redemption payout is significantly larger, the more milestones are achieved, and sustained till expiry.
If you are interested in Qi Success Options, please submit a proposal to the QiDao community in Discord.
If you are a protocol looking to create your own Success Options contract, reach out to the team at UMA.
About Mai Finance and QiDao
QiDao is Polygon’s first native stablecoin protocol, which has subsequently spread to other chains. It is self-sustaining, community-governed, and decentralized. Its stablecoin, MAI, is secured by being overcollateralized, ensuring that there is always more value locked in the protocol than the worth of outstanding MAI.
Mai Finance is a frontend for the QiDao Protocol, which allows users to interact with the various products of the protocol.
About UMA (Universal Market Access)
UMA builds open-source infrastructure for “priceless” financial contracts on Ethereum & Polygon. Specifically, this is two things:
- Priceless financial contract templates used to create synthetic tokens
- Decentralized Oracle Service used to manage and enforce contracts on UMA
Together, these two technologies enable the creation of fast, efficient, and secure derivatives on Ethereum & Polygon.