There are several ways for users of Marquee to earn with the protocol;
Users become fund providers after depositing stablecoins to the Marquee fund pool (or liquidity pool in the context of insurance). When they do so, they receive the ERC20 deposit certificate token IPST.
The fund pool provider:
- Provides liquidity to the insurance contract holders,
- Bears the risk of claims,
- Obtains the PnL from the fund pool in accordance with their weight in the pool.
Marquee supplies MARQ tokens through bonds. Bonders receive MARQ at a discounted price (lower than the market price) in exchange for mainstream crypto assets (e.g., USDT, USDC, BUSD, DAI).
The discount rate is set to compensate for the delayed delivery of the token. This process is irreversible; bondholders cannot use the purchased MARQ to redeem these assets.
Selling bonds at a discounted price stimulates arbitrage and increases the assets in the vault. The bond's maturity can be 15 mint epochs (~5 days) and is paid once per mint epoch (~8 hours). In other words, a bondholder receives 6.66% of the vested amount after the first epoch, 13.32% after the second, and so on.
The gradual release of MARQ prevents immediate sell-off by arbitrageurs.
*Bonds offerings can be extended to multiple maturities with varying yields.
By staking MARQ in the Marquee stake pool, stakers profit by taking a share of the returns from the vault. The return from staking MARQ is distributed by the mint & burn mechanism. An imbalance between MARQ and sMARQ (staked MARQ) is created whenever a bond is sold. This is when the mint & burn mechanism is activated.
The specific reward rate is determined by the number of sMARQ in the protocol and a rewarding yield. When a holder stakes in a certain amount of MARQ, s/he receives sMARQ in equal amounts. When the staker withdraws MARQ from staking, sMARQ is burned, and the holder gets MARQ in equal parts.
The total number MARQ and sMARQ is always equal, and the two can always be exchanged in 1:1. MARQ holders can only profit from the protocol by staking MARQ. Holding MARQ without staking it in the protocol will not yield any return. The sMARQ account balance updates every epoch, and the staker obtains a reward automatically. For more information on the rate of reward, head to Rate of Reward & APY.
Hence, the sMARQ balance will be automatically compounded in each epoch. In addition, the sMARQ can be transferred to other wallets. When a staker unstakes, the sMARQ balance will be burned, and the corresponding amount of MARQ will be received. Unstaking will forfeit the staker's most recent MARQ appreciation as an exit fee.
Liquidity Providers are essential in allowing for the smooth trading of MARQ.
LPs will use their MARQ tokens to provide liquidity in decentralised exchanges (DEXs) such as PancakeSwap. An example would be MARQ/ETH pool.
In return, they will be provided with an LP token that represents their assets, allowing them to be eligible for a portion of the trading fees accrued from the pool.