In the age of digital currency, many times over throughout different crypto assets' history, large price swings are apparent in nearly every market. These large swings can be profitable for some, but can cause a loss of confidence to holders and adopters. Q DAO i creating an ecosystem based on digital currency that is looking to stabilize its assets' ecosystem by providing assets backed by collateral. Q DAO is promoting their network by giving away assets, we'll talk about that at the end of the article, but we will take a look at Q DA) itself to get a better understanding of what it does and what it looks to accomplish.
On the QDAO platform, their are two coins available, the USDQ and the KRWQ. The USDQ is created using smart contracts backed by Bitcoin assets on a decentralized network on the blockchain. KRWQ and future stable coins, are linked to fiat currencies on a decentralized network. Either coin allows for smart contracts to enable the network to stabilize the price of their currencies on the network and create stability to the ecosystem using smart contracts and Collateralized Debt Positions.
There are 5 steps to creating a collateralized Debt Position or CDP
Having a digital currency based on a stable price backed by assets encourages users and an ecosystem that promotes trust and participation within the network which will help to expand use, and utilization.
The platform has a system in place that has several stages to protect the network and users in the event of attacks on the network. This process can start with shutting down loan and contracts and as a last resort, automatically sending collateral assets back to their users. This multi-tiered approach prevents losses to the users and further promotes trust within the ecosystem.
Users only need an email account with which to receive notifications and private keys to new wallets and an to access applications within the network.
Once users have their part in the network in place, they now can transfer Bitcoin and create loans based on individual parameters.
Once the network has established collateralized assets within users accounts, the network generates the USDQ assets and integrates access for the user throughout the ecosystem.
One of the best features is the ability for users to adjust their collateral depending on prices fluctuations. If their collateral price goes down, the user can adjust their collateral amount to ensure stability, alternatively, if their backed asset value goes up, th user receives that amount in a liquidation process.
When a user is ready to repay a loan, The user repays the USDQ-denominated loan and the Stability Fee, and users use their private keys to sign the transaction, allowing them to retrieve their collateral assets back.
On the Q DAO platform,there is an automatic process of liquidating CDP assets to ensure that there is enough collateral to ensure outstanding loans are covered. CDP liquidations are automatically engaged by the ecosystem by determining the Liquidation Ration based on the CDP type. These assets are purchased by the network and sold on the open market.
Q DAO consists of keepers. These are independent groups that utilize the network to earn a profit while contributing to the ecosystem and operations on the platform. These keepers use the platform for debt and collateral options while ensuring the process for CDP liquidation occurs smoothly. These keepers also ensure that the price of USDQ remains stable by buying or selling USDQ as the price rises or falls below $1 dollar.
In addition, keepers trade USDQ whenever it experiences short-term deviations from the Target Price. Whenever the current market price goes above the Target Price, keepers move to sell. And whenever the market price goes below, they buy. In this content, the Keepers expect profits to be realized when the coin returns to the Target Rate in the longer term.
Looking at the big picture, Q DAO is making a leap into the digital currency market by making a network which will allow smart loans based on smart contracts and a decentralized network which takes away much of the instability that most digital coins and tokens have. To promote their network, for a limited time they are giving away USDQ to users who want to promote and spread the word. To get your own free USDQ, head to their Bounty site to grab yours today!
For more information on Q DAO, here are some great links for more information:
Current Exchanges trading USDQ
November 11, 2020
David has a passion for cryptography, collectibles and helping people to form their own opinions.