How AQTIS mitigates risk

As seasoned investors with years of experience in crypto, we’ve witnessed how even the most promising DeFi projects can quickly deteriorate when market conditions shift. That’s why AQTIS has implemented several unique features within its Liquid Staking Tokens (LSTs) to help mitigate risk and provide additional safeguards for token holders.

Ecosystem Liquidity Insurance Fund (ELIF)

The Ecosystem Liquidity Insurance Fund (ELIF) is a key component in fortifying the stability and security of the AQTIS ecosystem. ELIF acts as a strategic reserve for excess yield, aiming to accumulate backup liquidity equivalent to up to 40% of the Total Value Locked (TVL) in the ecosystem.

Excess yield generated within the AQTIS ecosystem is directed to the ELIF, building a liquidity cushion designed to cover at least one year’s worth of APY, as well as safeguard against potential market drawdowns of 20% to 30%. This reserve is a critical line of defense, ensuring that AQTIS LST holders are protected even in volatile market conditions.

Security at the Source

AQTIS places a strong emphasis on security. No smart contract can directly claim or access the ELIF, which is a deliberate measure to prevent exploits. In the unlikely event of an external attack on the Yield Distribution Smart Contracts (YDSC), the maximum potential risk for AQTIS and its users would be limited to one month's worth of rewards. This ensures that the ELIF remains intact, providing continued protection for the ecosystem.

Permissionless Exits

AQTIS LSTs are designed with liquidity pools that allow token holders to sell their tokens quickly and safely at any time. Unlike some DeFi projects where liquidity information might be hidden or unavailable, AQTIS provides transparent, permanently available liquidity pools for its tokens, ensuring that users have the tools and confidence to make informed decisions.

Here are the liquidity ratios held in reserve for each AQTIS LST:

• QRT: 10-30% liquidity

• qETH: 30-60% liquidity

• QSD: 30-40% liquidity

For any DeFi token holder, knowing that sufficient liquidity is available, along with robust security measures, is crucial when deciding to buy or sell tokens. AQTIS goes a step further by ensuring that these details are easily accessible and transparent to the community.