> For the complete documentation index, see [llms.txt](https://quintes.gitbook.io/quintes/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://quintes.gitbook.io/quintes/core-mechanisms/qts-token.md). # QTS Token QTS is the **native governance and utility token** of the Quintes Protocol, designed to align incentives, distribute real yield, and govern the system sustainably. It powers staking, rewards, protection mechanisms, and governance, making it the coordination layer of the Quintes ecosystem. Unlike traditional fixed-yield staking systems, **QTS uses a Dynamic APY model**, ensuring rewards are always linked to the protocol’s *real economic performance* and long-term sustainability. *** ### Governance QTS holders actively participate in decentralized governance, shaping the protocol’s evolution by voting on: * **Collateral Factors:** Defining safe LTV ratios for wBTC, ETH, and USDC. * **Collateral Strategy Approvals:** Reviewing trading strategies managing collateral growth. * **Protocol Upgrades:** Approving system and economic improvements. *** ### Protection Pool Support A portion of the **QTS treasury** supports the **Protection Pool**, covering redemption shortfalls and maintaining system solvency during stress events. This mechanism reinforces the reliability of QNT redemptions and safeguards protocol integrity. *** ### Dynamic, Sustainable, and Transparent Yield * Rewards are **not newly minted** when claimed, they are distributed from a **pre-allocated pool** of QTS tokens. * The total QTS supply remains **fixed at 100 billion**, ensuring predictable tokenomics. * APY fluctuates dynamically based on **protocol revenue** and **active staking participation**. When more users stake, individual APY adjusts proportionally. Quintes draws inspiration from **ve-tokenomics** (vote-escrow models), rewarding long-term commitment without unnecessary complexity. *** ### Reward Sources & Distribution QTS staking rewards are funded by two primary sources: | **Source** | **Description** | | --------------------------------- | ------------------------------------------------------------------------------------------ | | **Protocol Revenue (Real Yield)** | 55% of all protocol revenue is allocated to reward pools. | | **QTS Emissions** | QTS tokens released from the Community Incentives Fund according to the emission schedule. | Rewards are distributed across specific activity pools to incentivize value-added behavior: | **Staker Type / Activity** | **Primary Asset (Sᵢ)** | **Reward Pool Funding** | **Calculation Method** | **Purpose** | | -------------------------------- | ---------------------- | ---------------------------------------------- | ---------------------- | ----------------------------------------------- | | **QTS Stakers** | QTS | 11% of Protocol Revenue + 10% of QTS Emissions | Weighted Stake (Wᵢ) | Encourages loyalty and governance participation | | **QNT Minters** | Collateral (USD Value) | 11% of Protocol Revenue + 60% of QTS Emissions | Weighted Stake (Wᵢ) | Incentivizes long-term collateral provision | | **QNT Liquidity Providers** | LP Tokens (USD Value) | 11% of Protocol Revenue + 25% of QTS Emissions | Weighted Stake (Wᵢ) | Builds deep QNT liquidity | | **Stablecoin Stakers (PSM/POL)** | Stablecoins (USDC) | 11% of Protocol Revenue + 5% of QTS Emissions | Pro-Rata | Supports stability reserves | > Note: Emission percentages are initial proposals and subject to final modeling and governance. *** ### Reward Calculation Engine Rewards are determined by a **Weighted Stake** metric that combines both capital and commitment. **Weighted Stake Formula:** $$ Wᵢ = Sᵢ × Dᵢ $$ Where: * **Sᵢ** = amount of asset staked * **Dᵢ** = lock-up duration multiplier **Reward Formula:** $$ Rewardᵢ = (Wᵢ / Wₜₒₜₐₗ) × Rₚₒₒₗ $$ *** ### Lock-up Duration Tiers and Multipliers | **Lock-up Duration** | **Multiplier (Dᵢ)** | **User Profile / Rationale** | | -------------------- | ------------------- | --------------------------------------------- | | Flexible (No Lock) | 1.0× | Maximum flexibility, no penalty | | 3 Months | 1.3× | Small bonus for short-term stakers | | 6 Months | 1.7× | Ideal balance between liquidity and yield | | 12 Months | 2.5× | Strong incentive for long-term believers | | 24 Months | 4.0× | Maximum multiplier for true protocol partners | *** ### Reward Distribution Cycle Rewards are distributed using a **weekly epoch model**: * **Calculation (Weekly):** Snapshots of all stakers’ Weighted Stake are taken at the end of each epoch. * **Distribution (User-Initiated):** Rewards accumulate in the contract and can be claimed at any time via the Quintes dApp (“pull” model for gas efficiency). *** ### Slashing Mechanism To preserve system integrity and prevent early withdrawals from high-multiplier stakes, Quintes enforces a **Curved Slashing Formula**: ``` Slashing_{%} = ((T_{end} - T_{now}) / (T_{end} - T_{start}))^k × 100% ``` * **k (Decay Factor)** – Governance-set parameter controlling curve steepness (default: k = 2). * **Slashed rewards** are recycled into the same reward pool, increasing APY for remaining loyal stakers. *** ### The QTS-QNT Feedback Loop
| Step | Description | | ---- | -------------------------------------------------------------------------- | | 1 | Users stake QTS to earn rewards from minting and liquidity activities. | | 2 | Stakers’ participation strengthens protocol stability and peg maintenance. | | 3 | A healthier protocol increases QNT adoption and liquidity demand. | | 4 | Rising QNT demand raises the intrinsic and governance value of QTS. | The portion of QNT minters who participate in QTS naturally causes QTS’ market cap to represent a notable fraction of QNT – our incentivized model aims for the QTS market cap to be **one-third of QNT’s market cap**. For example, if QNT’s market cap is $100 million, our aim is for QTS’s market cap to be a minimum of $33 million.