Martin Saldamando is a Strategic Partnerships Manager in Platinum Q DAO Engineering. Having a bright experience in B2B marketing, writing about technological innovation and building customer-inspired products and services. He writes regularly for international publications on crypto, fintech, regulatory compliance, blockchain, cloud computing, machine learning, and other topics. The team is currently developing USDQ, a fully decentralized stablecoin that makes it easy to collateralize Bitcoin for margin trading and hedging.
Martin sees Q DAO, an ecosystem for USDQ, as a potential driver for tremendous growth. He’s convinced that the team’s plans to launch other stablecoins pegged to fiat currencies, such as JPYQ, KRWQ, SGDQ, HKDQ, CNYQ, RUBQ, will attract attention from wider trading community.
Over the last quarter, the crypto market has had its fair share of fluctuation. But the USDQ stable coin is looking to hold its peg against its $1 price per coin. Moreover, KRWQ – a stablecoin pegged to Korean Won will be attached to Q DAO family. This will not only make a huge impact on the local Korean market but also to the whole Asian region
The stable asset known as USDQ is a cryptocurrency backed Bitcoin and top 10 cryptocurrencies in future. It is different from other stable coins which are referred to as legally-backed crypto. Unlike scandal and failed Tether (USDT), the USDQ stable coin does not rely on having US dollars in a bank account to back every single token. The USDQ coin uses ETH and BTC collaterals to back its price and maintain its peg in relation to the US dollar.
How the USDQ Stable Coin Works
First, the concept of pooling cryptocurrencies, in this case, BTC, is the first step towards understanding how the Q DAO ecosystem works. Users that want to have USDQ stablecoins will first have to pool and reserve their cryptocurrencies first so that USDQ are issued. So, by definition, no USDQ can be issued without it being collateralized and backed against existing crypto.
The entire Q DAO ecosystem is run by a smart contract. The contract determines if at any point is necessary to liquidate BTC reserves it will do it to stabilize the USDQ token at exactly $1 always. The actions taken by the smart contract system are also determined by the community of Q DAO token holders. The main governance token for the Q DAO and the USDQ frameworks.
USDQ is an ERC20 token and can be stored on any ERC20-compatible wallet, like MyEtherWallet or Mist. Users can now trade USDQ and Q DAO on BTCNext.io, a popular crypto exchange. It’s convenient that all trading pairs at BTCNext.io will be listed with USDQ as the basis currency.
USDQ Performance Against Crypto Volatility
The following scenarios have been run and analyzed to predict the performance of USDQ and how it would react along with its entire framework and security protections. Can the USDQ hold its peg? Let’s find out.
Let’s assume how USDQ would act if it was around before. For this, we will analyze the price of BTC which had a reduction in price towards the last quarter of 2018 and beginning of 2019.
- Looking at the beginning of November through mid-December we first find the BTC price dropping from approximately $6300 to around $3200 or lower in some exchanges.
- At this time what would happen is that the collateralized positions, known as CDCs will auto-liquidate. This basically means they are quickly sold to the highest bidder on internal auctions available to Q DAO token holders. Logically the supply of USDQ would see a reduction.
- What would happen next is that enough demand for USDQ will surge to become higher than the supply. Making the USDQ price potentially fluctuate above its target price of $1.
- Q DAO token holders can use their stake to raise more cryptos to create USDQ stable coins and recover the supply. The token holders could perform a vote to change something called the stabilization fee which is the interest charged to the CDCs. In short, this would be an attempt to make it cheaper to create CDCs and more USDQ.
- And voila! The price of USDQ would return to its $1 peg.
Why this works.
First, you have to consider USDQ supply increases along with demand for CDCs. The governance framework for Q DAO token holders can use incentives such as changing the stabilization fee to motivate more demand for CDCs. The relation between the demand for USDQ stable coins and demand for CDCs results in a user surge, as Q DAO token holders are restrained by market forces from charging excessive fees.
The USDQ stable coin and the Q DAO framework is a legitimate system based on transparency that allows a different more trustworthy stable asset to coexist in a completely decentralized ecosystem.
USDQ supply is meant to always scale along with demand for CDCs.
Also the Q DAO voting system to change the stabilization fund is a highly effective system to stabilize the price of USDQ however it is important to have a healthy rate of participants per each vote. The percentage may vary but it should be around 10% or more of the circulating supply of Q DAO tokens.
Can Negative Rates Help USDQ?
If USDQ would ever trade at less than $1 for a long period of time it would make the price of CDCs to go down. This could be beneficial for some parties but it would compromise the brand of USDQ and future growth, so, therefore, it is important for its peg to maintain and not allow negative rates.
The interaction between the demand for USDQ and for CDCs results in an excedent of users, for example, Q DAO token holders will be plenty and they would be restrained from charging excessive fees.
Additional challenges for the future could be including Oracles, on-chain governance that would not require its smart contract and finding better collateral options.
USDQ is not the only stable coin
According to data from the Blockchain company, there are a total of 34 stable coins available to the public. While USDQ is not the only option available it certainly is the most transparent one, by far.
Maybe you heard about the project MAKER DAO and their DAI?
I want to praise these guys – they are first to create a decentralized stable coin.
We occupy an honorable second place at this race, and basically, we were inspired by the technologies of MAKER`s DAI.
Some Q DAO functionality is similar to MAKER DAO, so we decided to use Maker`s terminology because we do believe – their technologies should be a reference for creating any decentralized stable coins.
Why we are using BTC as collateral? 1) Bitcoin is a most liquid digital asset 2) we have many friends who are big Bitcoin holders (BTC whales) or Bitcoin OTC traders.
We hope even so big guys like Brothers Winklevoss (Cameron Winklevoss and Tyler Winklevoss) will start to use Q DAO. They have a lot of Bitcoins, but they don’t want to sell it. So if they need money – they can pawn their bitcoins to Q DAO and immediately get USDQ.
Why we built Q DAO based on Ether smart contracts, but not Tron (by Justin Sun) and not EOS ( by Daniel Larimer)?
Our genius engineers are love ETHEREUM because of mass adoption of this blockchain, also we respect the approach of Vitalik Buterin (we met him a few times). Maybe in the future, we will consider using TRON or EOS, in case their foundations can provide enough funds to proceed with development.
USDQ is decentralized stablecoin, which uses smart algorithms to offer higher stability and reliability. Fully on-chain and monitored by high-speed AI robots, ecosystem offers reliable defences against malicious acts and attacks. First run in line of fiat-pegs, USDQ is brought by Platinum Q DAO Engineering team, looking to edge together innovative solutions in collateralization, using stabilizing mechanisms and neural networks for high-endurance stablecoins. Soon there will be even more fully backed stable coins: JPYQ, KRWQ, SGDQ, HKDQ, CNYQ, RUBQ under USDQ brand. Fully anonymous, USDQ breaks limits out of this legacy world.
BTCNEXT Exchange – next generation spot and margin trading platform by the PLATINUM Q DAO ENGINEERING team. It is the first Strategic business partner of USDQ stablecoin that is based on a DAO technology. All pairs will be listed with USDQ. BTCNEXT customer service will be happy to answer all of your questions.
The Platinum Q DAO Engineering team strives to help budding startups figure out their options for blockchain architecture, fundraising options and marketing strategies. Connect with the team right now in Telegram or Facebook. Blockchain up your business.
This overview may not be fully exhaustive and does not assess the viability of any project, nor its team legitimacy. Readers should conduct their own due diligence before using or investing in any of the listed Stablecoins. This article represents the author’s opinions only and should not be considered investment advice. All described functionality in the article is still under development, it can be changed/processed. Please follow the updates.