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

Thank you for your support!

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I have been using QiDao for a long time - good proposal considering their strong ecosystem.

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I join QiDAO on polygon chain and quite impress on their Mai token and it would be great if the platform also come to Opmimism. Looking forward to.

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Good idea,it will help to improve optimism ecosystem.

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just notice your comment on MakerDao proposal, care to provide some more info why you are supporting MakerDao proposal when they are not even offering a co-incentives and here you are requesting them to consider matching with $MAI ?

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Happily vouching for this proposal.

If you are not familiar with the protocol they are trusted - having a combined TVL north of 200m before this downswing - dont remember exact figures. There is also a lot of collaborative effort in their Gauge votes and community engagement overall.

MAI the stablecoin - the main product - is definitely battle tested and has liquidity everywhere.
Also, QiDao just passed a governance vote adding vault for the OP-token.

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As coauthor of the proposal and a briber of Optimism vaults, I can say that we are aligned with long term growth on the network @ScaleWeb3. We have a group of strong Optimism supporters that have lead to much of the TVL growth of QiDao on Optimism without liquidity for the governance token, and before there were even incentives to deposit minted MAI anywhere. We will continue to push growth on the platform with or without an $OP grant, but I want to make it clear that we plan on continuing the protocol’s expansion into Optimism regardless. I certainly hope we can align those goals with those of the long term growth of Optimism.

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Yeah my bad. I meant to say round 2 of phase 1, but that is not needed for the proposal. Disregard my comment.

Still I think that 900k $OP (90% of requested amount) for a project of your side distributes as incentives over 6 to 12 months is too much and not optimal.

And generally 1 million $OP is a big ask imo.

Hi everyone, thank you for all the support messages! We’re excited to be a part of the Optimism community and wish to continue allocating resources to our deployment here.

For those that still have some reservations, we want to address your concerns with some updates to our proposal.

Incentive amount

new amount: 750k OP

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.

Currently, demand for borrowing MAI on Optimism has been overwhelming - debt ceilings on our vaults don’t last more than a few seconds. Added liquidity onchain will allow us to increase debt ceilings and provide for more locked tokens on Optimism via lending.

Allocation of incentives

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)

Plans for use cases of MAI on Optimism

Lending

MAI has been approved into Aave by its governance and its listing is imminent.

DEXs

MAI is already present on all major DEXs on Optimism thanks to QiDao’s incentives program and partnerships on the chain.

Derivatives

QiDao will look to partner with derivatives platforms on Optimism, such as Lyra.

Bridges

MAI is already listed on cBridge and Multichain. We will work with Hop to get listed on their bridge as well to provide more avenues for bridging MAI into Optimism from its 20 chains.

Other partnerships coming for QiDao on Optimism

Beefy

QiDao has a long-standing relationship with Beefy. We will continue to add their interest-bearing assets as collateral for MAI as this market grows on Optimism.

Arrakis

The QiDao community has approved the use of GUNI positions on Uniswap V3 as collateral for MAI. As GUNI liquidity grows on Optimism, we will be able to use them as collateral for MAI.

Optimism

Our DAO recently approved OP as collateral for MAI. This will provide a major use case for OP holders. They will be able to mint MAI at 0% interest, thereby allowing them to use the value of their OP without having to sell it.

Optimism Alliance

We have a community within our DAO that is committed to our growth on Optimism. They call themselves the Optimism Alliance. They have been bribing our 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!

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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.

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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.

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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!

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

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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!

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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.