[READY] [GF: Phase 1 Proposal] QiDao Protocol

UPDATED PROPOSAL

Project Name: Qi Dao

Author Name: @geekvine and @benjaminqidao

Number of OP tokens to claim: 750,000 OP

L2 Recipient Address: 0xB1a8D1D6Dc07ca0e1E78a0004aa0bB034Fa73d60

DefiLlama TVL on Optimism: $3.61M

Proposal for token distribution: Distribute OP tokens to QiDao to grow the protocol on Optimism.

Rationale:

QiDao is a decentralized collateralized debt position stablecoin protocol where users can deposit tokens as collateral to issue MAI, the protocol’s decentralized stablecoin. It is the largest stablecoin protocol on Polygon, Fantom, Gnosis Chain, Moonbeam, and Moonriver. QiDao was deployed on Optimism two months ago and has seen explosive growth in relation to other chains the protocol is operating on. The goal of this proposal is to explain how to use this grant to increase the growth of QiDao and the Optimism Ecosystem.

QiDao is well integrated into the Optimism DeFi ecosystem, having sizeable liquidity on all major DEXs and bridges. MAI has also been accepted into Aave V3. Future integrations include Beefy, with whom QiDao has a multichain strategy with, Arrakis, and Optimism token (adding OP as collateral for MAI).

Additionally, QiDao has a community within its DAO that is committed to growth on Optimism. They call themselves the Optimism Alliance. They have been bribing QI voters weekly to vote in favor of Optimism vaults to receive borrow incentives. That has earned Optimism an added $10,000 of incentives per week!

How will the OP tokens be distributed?

20% for bounties on teams building on top of QiDao on Optimism

20% for borrow incentives

60% for MAI liquidity on Optimism (spread between Velodrome and Curve over the course of a year)

Breakdown on incentives QiDao is currently providing to Optimism users:

  • Beethoven/Balancer pool: 15,000 QI per week
  • Curve pool: 3,000 QI per week
  • Borrowing incentives: 40,590 QI per week

Total QI incentives: 3,046,680 QI annualized ($761,644).

Total OP incentives requested: 750,000 OP annualized ($457,844).

Not only is QiDao matching incentives, we’re exceeding proposed incentives on Optimism by 1.7x.

Supporting MAI liquidity on Optimism will encourage users to lock value on Optimism in the form of collaterals. Since MAI charges a repayment fee and no interest, locked value has a longer lifespan than it does on other lending and stablecoin platforms. This is due to users being incentivized to keep their debt positions open.

How will this distribution incentivize usage and liquidity on Optimism?

QiDao has voted to add OP as collateral for MAI (for 0% interest loans). This will allow OP hodlers to mint stablecoins against their OP instead of selling. If Optimism supports MAI liquidity, then more users will choose to borrow against OP rather than selling it.

MAI has consistently been a top volume provider for Curve on Fantom and Polygon, where MAI is the largest stablecoin protocol. This is because MAI pools have a higher volume to TVL ratio than most native stablecoins outside of Ethereum.

Growing MAI’s liquidity will allow more users to bridge value from other chains. MAI is currently one of the most crosschain tokens in crypto, with 20 chains available. As a result, it functions as an effective transfer of value across chains.

MAI’s 0% interest and repayment fee model encourages users to lock tokens on their home chain and keep loans open. This creates a resilient TVL for Optimism.

Why will the incentivized users and liquidity remain after incentives dry up?

For the past few months, QiDao has operated on a net profit (revenue has exceeded emissions). This shows that QiDao has built a durable model that can thrive without outsized emissions.

After OP incentives end, QiDao will continue to incentive usage on Optimism as it has for the past several weeks.

Over what period of time will the tokens be distributed?

  • Liquidity Incentives : 6 to 12 months depending on OP token price.
  • Borrow Incentives: 6 to 12 months depending on OP token price.
  • Grants Incentives: 3 to 6 months depending on the OP token price.

How much will your project match in co-incentives?

All incentives will be exceed by our emissions to Optimism users. Currently, QiDao will give $1.7 for every $1 of OP incentives.

OP token vaults will receive borrow incentives based on a bi-weekly community gauge.

1 Like

Hey! Good question -

For Maker, it is a proven protocol, with clear market fit for both DAI and other product lines.

QiDAO is a bit more nascent. For Maker to match - let alone pursue this proposal - is very bureaucratic.

By partnering with Maker, the benefit seems to be twofold - unparalleled marketing, encouraging the largest DeFi protocol by TVL to integrate with Optimism.

For $MAI - AFAIK there are much less strict minting requirements compared to DAI and is a great way to spread adoption and liquidity across the ecosystem.

Disclaimer: We are also a MakerDAO delegate.

Just want to note that we have very strict requirements to be added as collateral - more comparable to Aave. So I don’t agree with your last point.

Thanks for the correction here - seems the summer heat is getting to me.

Advocating for $MAI as match both to benefit users and the growth of the stablecoin.

Supportive of your proposal revision.

1 Like

I like the correctness of the requested funds, the distribution of incentives and the timing. They also include great co-incentives. TVL and QiDAO’s work in my opinion is very good.

Great job!

2 Likes

The updated proposal creates a win-win for both parties so we are in favor of supporting it.

1 Like

We’ve switched the proposal to “ready”!

Thank you to everyone for your support and thoughtful commentary. The proposal that we have today has been amended to account for the feedback given in the forum and elsewhere. I believe it is a fair proposal and will benefit the Optimism community greatly. Looking forward to continuing our work!

5 Likes

Voted: Yes

Pros:

  1. Co-incentives matched by 170%
  2. Can use OP as a collateral- Thank you for doing this.
  3. Distribution seems fair.
  4. Project has liquidity on other chain.

Cons

  1. Token distribution gap of 6months is quite big

I actually met someone from your team in ETHBarcelona … or was it ETHCC … I ehm … don’t remember! We talked a bit about the protocol and how it works which helped me understand a bit more about your protocol.

Thank you for adjusting the proposal to our comments.

I am a bit reluctant here, but will vote a reluctant yes:

PROS

  • took feedback from us and adjusted proposal
  • matching incentives and higher than the amount requested (considering OP price at time of proposal), 1.7x!

CONS

  • requested OP is a bit high in my opinion

Voted yes - Awesome incentives and updating the proposal based on feedback. Thank you for a well thought out proposal!

I am a weak yes on this proposal. The amount requested is high but it’s good to see the amount of usage so far on Optimism and other chains. I also like that QiDao will give $1.7 for every $1 of OP incentives.

We voted yes on this proposal. Although the amount requested is high compared to Optimism TVL, the team has a strong track record & significant TVL on other chains, and the incentive structure seems well designed for growth on Optimism.

support it, because chinese items is so rare.

Voting Yes this time as QiDao can contribute meaningful value with this proposal.

Value-add: Good (Size of project, Ecosystem involvement)
Amount: High
Op distribution: Okay-Good
Co-incentives: Good

Feedback was incorporated, the proposal is slightly more detailed and Op gets distributed slightly better. The incentive design is possibly lasting and positive for Optimism and the good co-incentives justify the high Ask.

Big fan of the QiDao team. They have a proven track record on multiple chains and it’s reflected in this proposal.

Value Added to Optimism: High
OP Requested: Good
Co-incentives: Great
OP Distribution Plan: Good

Nice Maker fork. Proven success in Polygon.

I have voted for it.

Voted For - I see you’re popular on Polygon PoS, I hope you’ll communicate to your audiences the benefits of rollups and Optimism specifically.

Thank you to everyone that has voted thus far! At QiDao, we’re hard at work to deliver on our promise to bring value to Optimism.

We’ve just launched OP as collateral for MAI. This means users will be able to mint MAI at 0% interest against OP tokens. On top of that, we’ll be providing a heavy incentives package to those that borrow MAI against OP. These incentives will be live on Sunday. Borrow incentives for BTC vault are already live.

If you have any questions/comments/suggestions, please come to our Discord. Will be happy to chat :slight_smile:

Launch announcement: https://twitter.com/QiDaoProtocol/status/1552845396740898816?s=20&t=8usqlzc5fnRi_an3xcWEmw

make sense my vote is for

[Final]

Voting: Yes

Qi Dao is a well-known protocol in our communities, providing benefits to those interested in taking out a loan. Amount of incentives in different strategies + co incentives is welcome, in addition to allocating for builders.

  • Contribution: Positive
  • OP distribution: Appropriate
  • Co-incentives: Yes
  • Impact in LATAM: Positive

Tips: Please keep the community informed about all this progress and new features added.

3 Likes