Exploring the price to yield ratio of QSD

The QSD mint price is always fixed at $1.00 USD, and the APY is set to 15% APY at the minting price.

This translates to an annual yield of $0.15 per 1 QSD, $15 per 100 QSD, $150 per 1,000 QSD, and so on.

QSD's transparent pricing model maintains a clear correlation between price and APY. However, once all 100 million QSD tokens are minted, market dynamics come into play. The price of QSD may fluctuate, but the yield per QSD remains at $0.15 USD. This approach creates a soft peg around the ideal yield-to-price ratio, ensuring the yield remains consistent while the APY dynamically adjusts based on the purchase price.

Let’s take a look at an example of this in action.

User B purchases 1,000 QSD on the open market at a premium after all QSD has been minted. Assuming a market price of $1.10 USD per QSD, User B would pay $1.10 USD for 1000 QSD but would still receive a $150 USD yield.

The APY of this transaction would be 13.63% APY, because of the premium QSD has been purchased at.

With User C however, there may be an even larger premium to acquire QSD, buying at a rate of $1.5 USD per QSD. The user would buy 1,000 QSD, but would still receive a $150 USD yield.

The APY of this transaction would be 13.63% APY, because of the premium QSD has been purchased at.