**Introduction**

QiDao is the only stablecoin protocol backed by Moonbeam assets. It is a decentralized overcollateralized stablecoin protocol where users can deposit tokens like WGLMR to issue MAI, the protocol’s decentralized stablecoin. MAI minting on Moonbeam is done directly through StellaSwap’s UI.

MAI has existed for over a year, holding its peg during moments of turbulence in the market. It is widely adopted in the DeFi ecosystem, being listed in major protocols like Aave, Balancer, Uniswap, Chainlink, Curve, Multichain, and many more.

What is MAI? Thread by MakerDAO: https://twitter.com/makergrowth/status/1464594646294741003?s=21

MAI was listed on Aave last month: https://app.aave.com/governance/proposal/?proposalId=93

![](https://user-images.githubusercontent.com/99628755/191818285-8ea46a49-a189-4006-a199-2db0f239bee0.png)

Link to MAI minting on Moonbeam: https://app.stellaswap.com/mai

**Motivation**

QiDao wants to accelerate the bootstrapping phase of liquidity on Moonbeam. The Nomad bridge exploit proved the importance of having native asset liquidity. Natively minted stablecoins, like MAI, provided safehaven for many users that saw their assets devalue completely.

As the Moonbeam community, we should encourage the usage and minting of MAI natively to create strong and durable liquidity on our DEXs. MAI minting will occur against native assets like GMLR, STELLA, and DOT, as well as their LP positions like stDOT-DOT.

This will help native assets reduce sell pressure thanks to MAI serving as a crucial use case. It will also stimulate volume on DEXs by providing uses for previously stale positions, like LPs.

Example of the interoperability we can create by supporting a native stablecoin protocol like QiDao: https://beefy.finance/articles/welcome-to-the-beefy-x-qidao-x-velodrome-strategy/

This could be implemented with Moonwell and DEXs on Moonbeam like StellaSwap and BeamSwap.

![](https://user-images.githubusercontent.com/99628755/191818768-a8a2998f-0e7c-4ec5-b258-81b9c92f646e.png)

**Risk management**

MAI has the most robust onboarding process for new assets. Aside from using the grading mechanism pioneered by Gauntlet, QiDao analyzes additional metrics such as onchain liquidity, slippage, and centralization of liquidity. These metrics are tracked by our community risk committee here: https://riskmanagement.qidao.community/

New asset listing process: https://docs.mai.finance/new-asset-listing/asset-onboarding-checklist

Audits performed on QiDao: https://docs.mai.finance/risks/security

Insurace, Tidal, and Solace all provide insurance products over deposits in the QiDao Protocol. These can be obtained by users directly and cover instances of smart contract exploits.

**On our Chainlink price feed usage**: 

https://chain.link/case-studies/qidao
https://chainlinktoday.com/qidao-expands-through-multi-chain-defi-space-with-chainlink-oracles/

![](https://user-images.githubusercontent.com/99628755/191819078-82fc4c92-f626-4afe-b795-5096f9d30458.png)

**Centralization**

QiDao is a community-owned and maintained project. No fundraising rounds were held leading up to the launch of the DAO and no insiders such as team members control a significant portion of the governance token supply.

**Experience**

The QiDao community has deep roots in the crypto world, with contributors having worked at Consensys, Gitcoin, and other major projects in the space. Our risk process is overseen by contributors with backgrounds from major banks in Wall Street.

The team is doxxed and regularly participates in events with prominent DeFi founders. This is an asset for Moonbeam as QiDao can help steer the crypto narrative towards Moonbeam.

* Panel with Aave, Curve, MakerDAO, and QiDao at ETHLatam:  https://youtu.be/CHuEQ10SnBA
* Fireside chat with BanklessDAO: https://www.youtube.com/watch?v=XURI7ezdd3Y&t=34s
* Fireside chat with founder of Balancer: https://www.youtube.com/watch?v=r8NjJt6dYOo&t=7s
* Fireside chat with ChainlinkGod: https://www.youtube.com/watch?v=ZNhBlVxHhRk
* Other appearances: https://www.youtube.com/c/QiDao/videos

**Grant proposal**

This grant aims to create a DeFi ecosystem that is resistant to temporal liquidity miners and strengthens Moonbeam native narratives. Specifically, this grant aims to increase the minting of MAI against native assets to provide stablecoin liquidity that is resistant to bridging issues.

**Assets supported**

Currently, QiDao supports WGLMR and xSTELLA. Plans are underway to add xcDOT, stDOT, and stDOT-xcDOT LP as collateral for MAI. 

Once WELL and other native assets have more trading history, they can be reviewed by the QiDao community to be onboarded as well.

Note on xSTELLA: a global cap of 5,000 MAI was placed on STELLA-backed loans. This is done to make it unprofitable to attempt any market manipulation of the token’s price. QiDao also maintains a treasury that can fully cover any debt issues that could arise from this collateral.

As STELLA evolves as a token, we will continually update the token’s risk parameters and debt caps. We feel it is important to allow projects like StellaSwap a chance at these innovative use cases early on. This way, our community doesn’t only focus on bridged, bluechip assets that are often ephemeral deposits by crosschain liquidity miners.

**Profit sharing**	

QiDao is hosted on the StellaSwap frontend. It is a full deployment of QiDao. We felt that it was important to partner with other native projects as that builds long term growth. As a result, we share profit from all MAI loans on Moonbeam with StellaSwap, showing our support for collaborative building.

**Grant**

We hope that Tier 3 can focus incentives on key areas: encouraging low slippage trading, minting stablecoins against native assets, and providing deep money markets.

The QiDao team has extensive experience with grant programs and chain development. We’ve seen chains rise and fall, and have learned what it takes to succeed as a chain. Through this experience, and through community discussions, we’ve come up with the incentive breakdown below.

**Phases of Liquidity Incentives**

The phases below are meant to coincide with those proposed by StellaSwap and Moonwell. We think it’s best to align this incentives program across community stakeholders.

* Phase 1 - 4 weeks: During the first 4 weeks, from October 5th to November 2nd, 2022 - As described in the Moonwell-StellaSwap proposal, this stage will be solely to build liquidity on DEXs
* Phase 2 - 8 weeks: During the next 8 weeks, from November 2nd to December 28th, 2022
* Phase 3 - 12 weeks: During the next 12 weeks, from December 28th to March 22nd, 2023

**Grant Distribution Details**

Amount: 2.5M

Use: incentivizing the minting of MAI against native assets like WGLMR, xcDOT, xcDOT-stDOT, and others. This also includes LP positions and potentially staked deposits on other platforms like Moonwell. More asset may be added as more native assets are onboarded by the QiDao community.

![](https://user-images.githubusercontent.com/99628755/191819293-66fad5b0-38e1-4892-8e8e-90f40736cbf2.png)

![](https://user-images.githubusercontent.com/99628755/191819447-ad124f41-f10a-4173-b14a-37596b510b53.png)

**Conclusion**

We strongly believe in the Dotsama ecosystem, having been the first stablecoin protocol to launch native minting on both Moonriver (December) and Moonbeam (May). Since then, we've engaged protocols and users to integrate ourselves within the community. We believe that Moonbeam can be the main hub for the Dotsama ecosystem, which is why it will need a stablecoin backed by Dotsama assets.

We appreciate you considering our proposal and look forward to keep building on Moonbeam!

 Summary: 
- QiDao is a decentralized overcollateralized stablecoin protocol where users can deposit tokens like WGLMR to issue MAI, the protocol’s decentralized stablecoin. 
- This grant proposal aims to increase the minting of MAI against native assets like WGLMR, xcDOT, xcDOT-stDOT, and others to provide stablecoin liquidity that is resistant to bridging issues. 
- It is an incentive program across community stakeholders in 3 phases from October 5th to March 22nd, 2023. 
- The amount of the grant is 2.5M and is for incentivizing the minting of MAI against native assets.

#201 QiDao Protocol Grant Proposal