Benefits & Use Cases
There are several use cases that attract users to QiDao. Below is a list of such uses cases. Note: this list is shown for illustrative purposes and does not constitute financial advise.
- Take advantage of 0% interest leverage: You can sell your MAI to buy more of your collateral tokens, levering your long positions. The QiDao Protocol does not charge interest fees, only a repayment fee at time of closing. This means that collateral token holders can maintain a levered long position in their collateral with minimal financial stress, focusing on their principle belief that their collateral’s price will increase.
- 0% interest borrowing: Borrow stablecoins against your collateral at 0% interest. This means that debt values do not increase in value over time.
- Borrow to “hold on for dear life” (HODL): Borrow stablecoins backed by your tokens to use the value of your tokens without exiting your long position.
- Borrow to buy other assets: Borrow against your existing wealth and buy more assets, expanding your investment portfolio. You could, for example, borrow MAI to buy other tokens such as ETH to hedge your Matic exposure.
- Consolidating debt: Borrow MAI to pay down high-interest debt, saving on interest payments. The only fees you will incur through borrowing MAI will be a repayment fee at the end of your loan.
- No scheduled payments: You won’t need to commit to monthly payments or deadlines; you can repay your debt at any time that is convenient to you and your needs.
- Instant lines of credit: You don’t need credit checks or someone else's permission to borrow miMatic. You are your own bank.
- MAI as collateral: Lending protocols require stablecoins to borrow tokens. You could use MAI as stablecoin collateral in those platforms, essentially using your original tokens as collateral for debt in lending protocols.
QiDao gives projects a way for their believers to “hodl” their tokens while still being able to use their value in the form of stablecoins. We envision any crypto community being able to create, govern, and benefit from stablecoins backed by their tokens as collateral.
Through QiDao, “hodlers” will be able to borrow against their tokens and receive stablecoins. This adds use cases for accepted tokens and provides upwards price pressure on the token from locking it out of circulation.
Other benefits for projects include:
- Stable pricing structures: By denominating pricing in stablecoins, projects can reduce volatility risk in revenues.
- Unique incentive benefits: Projects could provide user incentives to use stablecoins backed by their native tokens over other stablecoins. This is similar to how stores offer enhanced benefits when making in-store purchases with their store credit cards.
- Contributor payroll: Not all contributors accept project tokens, but paying in stablecoins like USDC means selling project tokens. This can create a harmful sell pressure for early projects. By using stablecoins backed by their tokens, projects can pay contributors without selling off tokens.