Systemic Risk

As with anything in crypto, there are risks. In the case of DeFi, there is always a risk that the price of a token falls so much that liquidity dries up, and token holders are trapped in their assets. AQTIS has been designed to allow price fluctuations to exist, while still being able to maintain liquidity for holders.

One of the key ways we do this is through the rewards generated from the quant tech investment strategy, which is at the heart of what we do. We have battle-tested multiple investment strategies to maximize profitability, which is then used to generate rewards, maintain price stability, and ensure liquidity.

Even in the event of a 30% drawdown, our financial modeling allows us to cover liquidity and yield across all three of our LSTs.

We have two key systems in place to protect the peg of our tokens to their yield:

1. Providing exit liquidity in the LPs: The QSD and QRT tokens maintain their liquidity through their liquidity provider (LP) pools on platforms like Uniswap and Balancer. The ELIF provides additional backup to ensure liquidity in these pools is sustained during times of market volatility.

2. The Ecosystem Liquidity Insurance Fund (ELIF): The ELIF acts as a backup pool for all of our LSTs whenever one of the pools is being drained. It essentially acts as a buffer between the quant tech and the LPs. We want instant liquidity demand to be provided by the ELIF, ensuring that the quant tech doesn’t have to exit positions and incur losses. This reduces systemic risk.