Picking up from where we left off, we would like to introduce our constant emission deflationary token: $QUARK. The $QUARKs are a fundamental constituent of the ecosystem, playing a crucial role in incentivising the liquidity. QUARKs would be produced at a constant emission rate of 1 per block to be distributed across the liquidity pools as rewards. There are 4 main parameters that would be of interest to the end-user and that would define the direction of the protocol.
- Emission rate / Distribution rate
- Deposit fee
- Investment lockup horizon
- Reward lockup horizon
Once the initial accumulation phase has been completed, $QUARKs emission rates for an avenue could be a fractional value of the target emission, dependent on the dynamically adjusted rates and the user’s chosen reward lock period. This would range between (1 ⁄ n) or (n-1 ⁄ n) times the elementary emission rate. We like to call this the degree-of-freedom as is prevalent in quantum physics. As users give up more degree-of-freedom for their $QUARKs or liquidity tokens, their emission rate increases. In simpler terms, compared to existing AMMs, a user agreeing to lock her accumulated $QUARKs for a given time horizon (much like options in traditional finance) would receive a larger share of the pools rewards. We believe this would incentivise $QUARK holders to continue providing liquidity and allow a healthy price discovery for the native token.
Although we cannot predict what would happen in the price discovery period, past examples have shown the prevalence of fear and abrupt token selloffs leading to distrust in the mechanisms. While the deposit fees and dynamic emission rates are meant to control this, we will also be performing regular $QUARK annihilations by purchasing back tokens from the market using the deposit fees collected.
We will publish a detailed chart for the target milestones for annihilations shortly.
The Big Bang
It is believed that in the period of a few microseconds after the Big Bang (the quark epoch), the universe was filled with quark–gluon plasma, as the temperature was too high for hadrons (stable quarks) to be formed. Even so, the universe was came into existence and we are here today. Likewise, we believe there will be extreme volatility during the initial stages of the liquidity generation, but we are of the opinion that there will be no pre-sale or strategic investments and the market will find a way to stabilise itself.
In the interest of attracting liquidity providers to build a sufficiently liquid pool our team has decided that during the initial phase,
- All rewards would be immediately withdrawable
- All investments would be immediately withdrawable
- The deposit fee is set to a constant value of 4% across all liquidity avenues
- The dynamic fee adjustments will be turned off.
This means that only the 3rd option would be available during The Big Bang phase. Once the liquidity stabilises, we will be turning on the dynamic fee adjustments, and enabling the locked rewards and investments pool through a timelocked transaction along with announcements in the community. The locked deposit/reward pools would be separate new pools that will be created after the announcement. Under no circumstances will your fund be moved/locked automatically. Consequently, the user pays varying rates of deposit fees for staking liquidity in our pools. Once staked, our proposed framework incentivises users to lock their rewards for longer as the reward emission rates are dynamically adjusted by the developers.