Three years ago today, QiDao was founded as a native collateral-backed stablecoin protocol. It brought the benefits of native lending to new chains that previously relied on bridged assets. By deploying on low-cost chains, QiDao was able to grow its user base to a wide audience of people that had previously been priced out.
As we celebrate our community’s third year, we reflect on the many accomplishments and challenges of the past twelve months.
Repeg
Due to a coordinated effort by members of the Gotchi Vault team, MAI depegged in June 2023. A short position at QiDao, followed by leveraged short position on Aave imbalanced MAI’s liquidity pools on QuickSwap. Given the narrative surrounding Fantom’s main bridge attack, the depeg was prolonged for several months.
Interest rates were instituted as a way of dynamically managing MAI’s supply and its peg. The DAO also committed significant amounts of funds to repeg MAI, buying back and burning over 1.5 million MAI. Today, MAI has returned to peg in most of its deployments, namely Polygon and Ethereum. Isolated tests of the system on Base and Linea have also proven the viability and resilience of the system. Further governance actions are expected for the remaining chains, such as Optimism and Arbitrum.
New isolated deployments
Under a new isolated chain strategy, QiDao deployed its CDP system on Base and Linea. MAI tokens on those chains have been completely separate from other chains, and all collateral assets are native tokens on those chains. Additionally, a novel Peg Stability Module was launched on those chains to create partial redeemability for MAI tokens. These deployments served as an important test of QiDao’s stablecoin economics in the post-Fantom era.
The results were incredibly successful. On both chains, MAI has been stable and all system components have functioned as expected. QiDao operations have been especially successful on Base, where the treasury has grown by over $3M in the 6 months since the chain launch. The protocol’s deployment on Base has also benefited other native projects, with QiDao accounting for almost 20% of USDC deposits at Compound.
The minting model for MAI tokens is currently profitable for QiDao, with profit margins consistently above 90%. No QI tokens have been used to incentivize user activity in over 6 months. Given profitability at the minting level, only fees are used to perpetuate the health of the system.
End of Keeper Period
The Keeper period, consisting of a 3-year token vesting, has concluded. Keepers were team members tasked with maintaining the protocol in the right course as the DAO matured in size and procedures.
Over the past 3 years, the Keepers have created a robust community of contributors and one of the most active DAOs in crypto. Community members as well as notable projects have all contributed to DAO engagement and decision-making. Now that the Keeper period is over, the community will step up to lead the direction of the protocol. Improvement proposals are permissionless to DAO members, so contributors are encouraged to approach the DAO with ideas.
To learn more about the evolution of our DAO, read here: https://mirror.xyz/qidaoprotocol.eth/o3CEXcXBshGltLSVMzGRq1itdR_hjN5lpyLWzaYbdG0
The Next Step - expanding the scope and size of QiDao
A community member has reached out to establish an independent unit within QiDao. This project aims to advance the efficiency and safety of lending. Leveraging QiDao’s battle-tested codebase, with additional mechanics, the project will significantly increase availability and usage of assets on L2s. The innovation will involve a more automated design that is simple and contained.
MAI pioneered cross chain fungibility, creating the first crosschain fungible token through its Hub model. The system allowed users to transfer stable assets between chains, at a time when there were no clear standards. This new project will build on this idea to create a unified liquidity architecture for Ethereum-aligned ecosystems. The goal is to expand on MAI’s vision of frictionless crosschain token usage by creating a system that facilitates movement for various tokens.