# Marquee
Protect Assets, Earn Premium.
Marquee is a decentralised insurance platform that allows users to protect their digital assets and earn premiums while providing liquidity.
**Why Marquee?**
* **Wide Coverage**Crypto Prices, Smart Contracts, NFTs, TradFi & Parametric Covers.
* **Sustainable Returns**Users can earn by being a fund provider, bonder or staker.
* **User Payouts**Users are our priority. We ensure users are paid through 4 layers:
* Insurance Premia, the Fund Pool, the Vault & MARQ token.
* **Trustless**The DAO decides how assets are controlled, distributed & protected. No single user or team member can manipulate the protocol.
For Insurance Purchasers: [Cover Products](https://web.archive.org/web/20231208015254/https://docs.marquee.fi/cover-products)
For Liquidity Providers: [Earn](https://web.archive.org/web/20231208015254/https://docs.marquee.fi/earn) and [Tokenomics](https://web.archive.org/web/20231208015254/https://docs.marquee.fi/tokenomics)
# Industry Overview
What are the opportunities in the current DeInsurance market?
DeFi insurance is a severely undeveloped market. The ratio of current Total Value Locked (TVL) of insurance products in DeFi is less than 1% (as of Jan 2023), while the ratio of the counterpart in the real world (TradFi insurance) is 8.6% (Statista, 2022). Therefore, the potential market gap is multi-billion dollars. Indeed, many crypto participants are speculators, but there is a genuine demand for hedging and protection of crypto assets subject to malicious cyber-attacks and unexpected volatility. To meet the intertwined needs of value investors and speculators, Marquee aims to provide a product for “insured speculations and speculative insurances.”
Three substantial gaps in the current DeFi insurance market hinder the growth of DeFi as a whole.**1) The first gap exists between the crypto and real worlds in the crossover circulation of value and information.**
On the one hand, DeFi players cannot go to a traditional insurance company to insure their crypto assets like cryptocurrencies and NFTs. On the other hand, conventional insurance needs (e.g., health, vehicle, pension, war, catastrophe) can rarely be insured in existing DeFi insurance products.
**2) The second gap lies between DeInsurance and other DeFi projects in the external circulation of value and information within the crypto world.**
Less than half tokens can be insured in DeFi. Specifically, it is difficult to find insurers willing to provide insurance for the most insurable high-risk projects due to a lack of data and excessive uncertainties. Let alone the availability of different types of insurance for different needs.
**3) The third is the gap between the supply and demand for liquidity in the internal circulation of value and information within each DeFi insurance project.**
DeFi insurance needs a sufficiently sized fund pool to exploit the Law of Large Numbers. Lack of liquidity makes it difficult to bootstrap the project from scratch while providing low-cost, wide-coverage insurance.
Underlying any successful DeFi project is a sustained business model, and adequate liquidity is key to the growth of any DeFi protocol. After countless failures in the first generation DeFi (or DeFi 1.0) due to liquidity drain, the concept of DeFi 2.0 has become popular among investors in the crypto world after the demise of projects which had yields that easily exceeded 2000%.
Essentially, DeFi 2.0 alters the relationship between fund providers and protocols through Decentralized Autonomous Organizations (DAOs), where various incentive mechanisms retain funds in the protocol. Instead of simply using liquidity mining to reward and attract “mercenary liquidity” with meagre retention rates as in DeFi 1.0, the Protocol Controlled Liquidity (PCL) aids in the increase of liquidity and retention rates within a protocol ecosystem.
The PCL design incentivises and encourages a sustained, interconnected decentralised financial architecture and ecosystem that facilitates an interdependent relationship among all platform members. As a cornerstone, the [Vault](https://web.archive.org/web/20231208020134/https://docs.marquee.fi/structure-overview/vault) (also termed a repository or reserve in other DeFi 2.0 projects) plays a crucial role in supporting the ecosystem and avoiding liquidity battles among yield farmers. Only by achieving a fair and reasonable distribution of power and revenue, rather than crafting a tool merely for reaping profit, can we bring long-term prosperity to DeFi applications.
Regardless of the precise definition of DeFi 2.0, some new DeFi applications have emerged with great potential for the latest stage of DeFi models. Marquee aims to lead the trend with its innovative application in DeFi insurance. We will first paint a big picture of the architecture of the tokenomics model and the business model of Marquee before digging into the details in subsequent sections. Head over to [Structure Overview](https://web.archive.org/web/20231208020134/https://docs.marquee.fi/structure-overview) to understand further.
# Mission & Vision
What does Marquee want to achieve?
### Mission
* To be the leading one-stop insurance platform for both DeFi and TradFi users to hedge and protect their digital assets.
* Connect All Participants. Protect your digital assets and earn premiums with Marquee.
### Vision
* To establish a new era of DeFi insurance by creating a sustainable relationship between insurers & the insured. A maturing DeFi market requires an insurance provider like Marquee that users can trust.
# Industry Overview
What are the opportunities in the current DeInsurance market?
DeFi insurance is a severely undeveloped market. The ratio of current Total Value Locked (TVL) of insurance products in DeFi is less than 1% (as of Jan 2023), while the ratio of the counterpart in the real world (TradFi insurance) is 8.6% (Statista, 2022). Therefore, the potential market gap is multi-billion dollars. Indeed, many crypto participants are speculators, but there is a genuine demand for hedging and protection of crypto assets subject to malicious cyber-attacks and unexpected volatility. To meet the intertwined needs of value investors and speculators, Marquee aims to provide a product for “insured speculations and speculative insurances.”
Three substantial gaps in the current DeFi insurance market hinder the growth of DeFi as a whole.
**1) The first gap exists between the crypto and real worlds in the crossover circulation of value and information.**On the one hand, DeFi players cannot go to a traditional insurance company to insure their crypto assets like cryptocurrencies and NFTs. On the other hand, conventional insurance needs (e.g., health, vehicle, pension, war, catastrophe) can rarely be insured in existing DeFi insurance products.
**2) The second gap lies between DeInsurance and other DeFi projects in the external circulation of value and information within the crypto world.**Less than half tokens can be insured in DeFi. Specifically, it is difficult to find insurers willing to provide insurance for the most insurable high-risk projects due to a lack of data and excessive uncertainties. Let alone the availability of different types of insurance for different needs.
**3) The third is the gap between the supply and demand for liquidity in the internal circulation of value and information within each DeFi insurance project.**
DeFi insurance needs a sufficiently sized fund pool to exploit the Law of Large Numbers. Lack of liquidity makes it difficult to bootstrap the project from scratch while providing low-cost, wide-coverage insurance.
Underlying any successful DeFi project is a sustained business model, and adequate liquidity is key to the growth of any DeFi protocol. After countless failures in the first generation DeFi (or DeFi 1.0) due to liquidity drain, the concept of DeFi 2.0 has become popular among investors in the crypto world after the demise of projects which had yields that easily exceeded 2000%.
Essentially, DeFi 2.0 alters the relationship between fund providers and protocols through Decentralized Autonomous Organizations (DAOs), where various incentive mechanisms retain funds in the protocol. Instead of simply using liquidity mining to reward and attract “mercenary liquidity” with meagre retention rates as in DeFi 1.0, the Protocol Controlled Liquidity (PCL) aids in the increase of liquidity and retention rates within a protocol ecosystem.
The PCL design incentivises and encourages a sustained, interconnected decentralised financial architecture and ecosystem that facilitates an interdependent relationship among all platform members. As a cornerstone, the [Vault](https://web.archive.org/web/20231208020134/https://docs.marquee.fi/structure-overview/vault) (also termed a repository or reserve in other DeFi 2.0 projects) plays a crucial role in supporting the ecosystem and avoiding liquidity battles among yield farmers. Only by achieving a fair and reasonable distribution of power and revenue, rather than crafting a tool merely for reaping profit, can we bring long-term prosperity to DeFi applications.
Regardless of the precise definition of DeFi 2.0, some new DeFi applications have emerged with great potential for the latest stage of DeFi models. Marquee aims to lead the trend with its innovative application in DeFi insurance. We will first paint a big picture of the architecture of the tokenomics model and the business model of Marquee before digging into the details in subsequent sections. Head over to [Structure Overview](https://web.archive.org/web/20231208020134/https://docs.marquee.fi/structure-overview) to understand further.
# Mission & Vision
What does Marquee want to achieve?
### Mission
* To be the leading one-stop insurance platform for both DeFi and TradFi users to hedge and protect their digital assets.
* Connect All Participants. Protect your digital assets and earn premiums with Marquee.
### Vision
* To establish a new era of DeFi insurance by creating a sustainable relationship between insurers & the insured. A maturing DeFi market requires an insurance provider like Marquee that users can trust.
# Structure Overview
How is everything connected?
**Key Components:**
* [Vault](/structure-overview/vault)
* [Staking Pool](/structure-overview/staking-pool)
* [Fund Pool](/structure-overview/fund-pool)
* [DEXs](/structure-overview/dexs)
**Key Participants:**
* Insurance Purchasers: Visit Cover Products for the wide range of products available to insure.
* Fund Providers
* Stakers
* Bonders
* Liquidity Providers
# Vault
The fundamental feature of Marquee is the Vault, a DeFi 2.0 repository or reserve of funds. Other DeFi 2.0 projects also call it "treasury".
#### Connection to Bond
The vault accepts mainstream crypto assets in exchange for [MARQ](https://web.archive.org/web/20231208034924/https://docs.marquee.fi/tokenomics) tokens at a discount. The discount motivates investors to purchase MARQ from the vault ([Bonders](https://web.archive.org/web/20231208034924/https://docs.marquee.fi/earn#bonders)) rather than from exchanges. Each newly issued MARQ via bonds is accompanied by several MARQ minted at the same time (The number of MARQ minted depends on the current market price. For more information about minting, please refer to Mint & Burn). These MARQ tokens are retained in the vault to pay for the indicative APY to bonders and the losses in unlikely cases where insurance funds are insufficient to cover the compensation.
#### Connection to Fund Pool
Apart from outside investors, the vault can also act as a [Fund Provider](https://web.archive.org/web/20231208034924/https://docs.marquee.fi/structure-overview/vault) to provide adequate liquidity for the fund pool to bootstrap the growth of insurance projects. Analogously, the vault acts like a "central bank" to commercial banks or a "reinsurer" to traditional insurance companies. The vault is governed by the protocol to mint and burn tokens to support the price of MARQ, so MARQ is always backed (not pegged) by one USDT. Therefore, MARQ is not subject to uncontrolled inflation, and it can serve as a reserve crypto asset.
#### Connection to Staking Pool
Vault receives a portion of the insurance premia according to its shares. By staking MARQ in the Marquee Staking Pool, stakers make a profit by cutting a share of the returns to assets in the vault.In other words, the price of [MARQ](https://web.archive.org/web/20231208034924/https://docs.marquee.fi/structure-overview/vault) can grow over time if the funds in the vault grow faster than the [MARQ](https://web.archive.org/web/20231208034924/https://docs.marquee.fi/structure-overview/vault)[ ](https://web.archive.org/web/20231208034924/https://docs.marquee.fi/structure-overview/vault)issuance. In the meantime, Marquee seeks to support valuable DeFi insurance projects by providing infrastructure and liquidity.
# Fund Pool
DeFi insurance needs a big-enough fund pool to exploit the Law of Large Numbers. Lack of liguiditymakes it difficult to bootstrap the project from scratch while providing low-cost, wide-coverageinsurance.
The Fund Pool allows for the collection of funding to be used as collateral for covers and claims whilstalso allow the collection of premiums, to be distributed to fund providers via $lPST.
It is the cornerstone of Marquee's sustained business model, whereby it bridges between fundproviders and insurance cover purchasers and would accrue the law of large numbers to assist in thegrowth of the eco-system.
The fund pool manages the assets of insurance purchasers 8 2 fund providers.The fund pool is a ERC20 smart contract which stores the premium and cover purchases that havebeen deposited. The pool also manages the flow of funds to the lPST token value as a means to accruethe premia that is entitled to the lPST token holders (Fund Providers).
When a user purchases insurance, the fund pool will:
➡️Issue an ERC721 token to the user to represent their claim on the pool.
➡️Collect the insurance premium g hold it within the fund pool.
When a user provides their funds to become a 22 Fund Provider for insurance purchasers, the fundpool:
➡️Collect their assets g hold them within the & fund pool.
➡️Issue an LP token ($lPST) to the 2 fund provider to represent their assets in the pool.
➡️Distribute premia payout via the increased valuation of $lPST.
**Fund Pool Occupancy Rate and Liquidityissue prevention**
In order to ensure that there are enough funds in the pool to pay for all insurance claims, Marquee hasset a limit on the funds occupied by insurance contracts from the fund pool. When the maximum limitis exceeded, new users can no longer purchase any insurance contracts. The maximum occupancylimit of Marquee's fund pool is 80%.
Definition of fund pool occupancy rate:
# Staking Pool
The staking pool will manage the assets of stakers. Specifically, it handles the following:
**1. Collection of Staked Assets**
➡️Assets are staked in the form of $MARQ
➡️Stakers are then credited Staked $MARQ (sMARQ) to represent their share of the staked pool
**2. Distribution of Staking Rewards**
➡️Rewards are minted when a user purchases a bond
➡️They are distributed every epoch (currently set at 8 hours)
➡️sMARQ balance will be automatically compounded in each epoch.
**3. The staking pool will be eligible for a share of returns generated by the Vault**
➡️The portion of returns to be distributed will be managed by Marquee's DAO Governance.
**4. Withdrawal of Staked Assets**
➡️When a staker unstakes, the sMARQ is burned and the holder receives MARQ in equal amount.The total number MARQ and sMARQ always equal and the two can always be exchanged in1:1.
# DEXS
DEXs will provide market participants with an external trading facility to buy \&sell their $MARQ tokens. Other than purchasing bonds, buying from a DEX will be the only way to receive $MARQ.
Marquee's primary DEX will be on Uniswap, where the project will bootstrap the liquidity pool. Users looking to earn trading fees on their $MARQ can become liquidity providers to earn passive income.
# Cover Products
Marquee provides extensive coverage on a range of different categories:
➡️Crypto Price Cover
➡️Smart Contract Cover
➡️NFT Cover (Coming Soon)
➡️Traditional Finance Cover (Coming Soon)
➡️Parametric Cover (Coming Soon)
Users can purchase insurance policies through Marquee at any time. Marquee calculates theinsurance premium using public information such as current currency price, volatility, guarantee time.Insurance amount and other conditions to determine the policy compensation payout ratio. After theuser signs up using their wallet and pays the quoted premium, Marquee will generate an NFTinsurance contract for the user, which includes strike price, expiration time, payout ratio,compensation amount, etc. Due to the fact that the parameters for each insurance contract must bedifferent, every contract is unique. Part of the insurance premium paid by the user will be extracted bythe platform as management fee.
### Crypto Price Cover
Crypto Price Cover is Marquee's flagship insurance offering. We provide coverage on most blue-chip cryptocurrencies, such as:
* Bitcoin
* Ethereum
* BNB
* And more
Marquee offers Crypto Price Cover to users who hold certain ERC-20 tokens. The insurance premium is calculated based on the underlying assets price path and the option-pricing model. The insurance contract contains information such as start time, strike price, payout amount (ratio), etc. The condition that triggers payment is the following. When the insured token’s price reaches the level specified on the contract, the product pays the users according to the amount purchased and the payout ratio.To provide policy holders a fair and just outcome, Marquee uses Chainlink Oracles (a decentralised price oracle) to fetch price information. Once the insured token's price reaches the level specified in the contract, the product pays the users automatically according to the amount purchased and the payout ratio.
### Smart Contract Cover
Marquee provides smart contract coverage on DeFi protocols ranging from small to large. Get covered for security exploits on platforms such as:
* Aave
* PancakeSwap
* Balancer V2
* And more
Marquee Smart Contract Vulnerability Insurance will pay out for:
1. the digital currency assets of the insured suffer material losses from an accident caused by the insured smart contract due to its security vulnerability during the validity term of the policy; and
2. that the assets that were covered of the insured are permanent and irreversibly removed from their ownership, such as assets being moved to another address or addresses that the insured cannot access and/or control; and
3. the affected wallet address exposed to said losses is the same wallet address used by the insured when purchasing insurance and the insured user would have to prove his ownership of the affected wallet.
Marquee ensures the claim data is on-chain, open and transparent. Insurance purchasers need to provide any proof or evidence when claiming. The claim will be reviewed by the DAO. The Advisory Committee, Professional Claim Adjusters and Public Claim Adjusters vote together to determine the outcome of payout is fair and just.
### NFT Cover (Coming Soon)
NFT investments are illiquid and speculative. Protect your favourite NFT collections with Marquee from extreme market conditions.
### Traditional Finance Cover (Coming Soon)
TradFi Cover is insurance coverage for a wide range of assets from traditional markets.Marquee will provide protection for:
* **Stocks**
* **Forex**
* **Commodities**
### Parametric Cover (Coming Soon)
Parametric Covers provide insurance against the occurrence of certain events that tend to have an adverse effect on a user's financial health.Marquee will provide coverage for a wide range of events, such as:
* **Natural Disasters:**
* **Pandemic Protection:**
* **Other:**
* Flight Delays
* Lost Baggage
# Earn
There are several ways for users of Marquee to earn with the protocol
* Fund Providers
* [Bonders](#bonders)
* [Stakers](#stakers)
* [Liquidity Providers](#liquidity-providers)
**Fund Providers**
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](https://web.archive.org/web/20231208031304/https://docs.marquee.fi/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.
#### Bonders
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](https://web.archive.org/web/20231208031304/https://docs.marquee.fi/earn). 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.*
#### Stakers
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**
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.
# Protocol
##
# Pricing Model
**Crypto Price Cover Pricing Model**
Since insurance is in effect options and hence, the insurance premium can be calculated using Monte Carlo method. In the risk-free environment, suppose the underlying asset price follows geometric Brownian motion:
In the discrete-time form, μ is the expected return, and σ is its standard deviation and follows a standard normal distribution.Following the Taylor expansion, we can find the price path of the insurance premium:
Since
We have
Where μ = r is the risk-free rate, σ is the yearly standard deviation of the underlying asset's return, and T - t is the time to maturity,is the price of the underlying asset at period t. The key variable that controlsiswhich can be obtained by samplingand simulating the price path of the underlying asset. This allows us to calculate the insurance premium.
# Technical Solutions
Our technical solutions are composed of the following:
* [Layered Architecture](#layered-architecture)
* [MARQ Price Oracle](#marq-price-oracle)
### **Layered Architecture**
**Application Layer**
To enlarge the spectrum of insured products, MarqueeINS encapsulates insurance services and smart contracts into an API that developers can use. It also provides services to MarqueeINS’s products.
**Settlement Layer**
The price aggregation signature service is responsible for issuing the private key to the data signature package. The smart contract will receive the data signed by the private key for settlement. Regarding the security of the private key, the MPC-distributed private key is used for safe storage. The execution environment is also executed in the Intel SGX secure and trusted environment.
**Funding Aggregation Protocol**
MARQswap integrates the O3swap fund pool functions. The MARQswap protocol will be supplemented according to product characteristics to facilitate users’ participation in the insurance.
**Networks**
The network layer is the carrier of user assets. MarqueeINS will gradually support more and more public chains to participate in insurance.
### MARQ Price Oracle
The MARQ price oracle provides the essential service module feeding price information to smart contracts. The price oracle takes the most authoritative data sources to prevent issues caused by the abnormally fluctuating price of a single currency which causes problems in settlement of smart contracts. All data are safely fed through a trusted execution environment, preventing hostile behavior. The price signature private key is divided into copies through the TSS threshold signature algorithm and stored in different trusted environments to avoid single-point failures. Price data will be signed through multi-node private key distribution to provide smart contracts.
The capacity of MarqueeINS depends on the scale of the fund pool. The larger the pool, the greater the number and amount of insurance policies underwritten. At present, USDT holders are spread on multiple public chains. We use the MARQ Hub cross-chain solution to solve the problem of asset decentralization and map all stablecoin assets to the BSC network. The answer is composed of O3 Hub cross-chain pool and poly network. For example, a user with hUSDT on the Heco public chain can obtain bUSDT of the BSC public chain through the Hub, and the user directly stakes the bUSDT into the fund pool to become an underwriter to receive rewards.
# Secondary Offering & Repurchase
The stablecoin USDT backs MARQ. When the price of [MARQ](https://web.archive.org/web/20231208031610/https://docs.marquee.fi/protocol/secondary-offering-and-repurchase) lies above USDT, the protocol automatically supplies and distributes new [MARQ](https://web.archive.org/web/20231208031610/https://docs.marquee.fi/protocol/secondary-offering-and-repurchase), which drives the price of [MARQ](https://web.archive.org/web/20231208031610/https://docs.marquee.fi/protocol/secondary-offering-and-repurchase) down. When the price of [MARQ](https://web.archive.org/web/20231208031610/https://docs.marquee.fi/protocol/secondary-offering-and-repurchase) lies below USDT, the protocol automatically purchases and burns existing [MARQ](https://web.archive.org/web/20231208031610/https://docs.marquee.fi/protocol/secondary-offering-and-repurchase), which pushes up the price of [MARQ](https://web.archive.org/web/20231208031610/https://docs.marquee.fi/protocol/secondary-offering-and-repurchase). At the end of each epoch, the supply or the repurchase occurs based on the above rule to stabilize the [MARQ](https://web.archive.org/web/20231208031610/https://docs.marquee.fi/protocol/secondary-offering-and-repurchase) price.
The amount of newly minted [MARQ](https://web.archive.org/web/20231208031610/https://docs.marquee.fi/protocol/secondary-offering-and-repurchase) is given below:
The amount to repurchase is given below:
TWAP is the time-weighted average price of MARQ in the week.
**ICV** is the inflation control variable that can be adjusted by DAO governance to control the degree of inflation; a higher value of ICV indicates a greater amount of MARQ supply and hence, a greater inflation rate.
**DCV** is the deflation control variable which is again controlled by DAO governance. The greater DCV, the greater amount of repurchased and burned MARQ.
Finally,
Where Reserves are the total value of assets reserved in the vault.
# Rate of Reward & APY
**Rate of Reward**
The reward rate to stakers is the percentage increase in sMARQ in the next epoch. The reward rate can be calculated below:
Where is the reward rate in the current epoch,is the total amount of MARQ allocated to stakers is the total amount of sMARQ from the last epoch.
**Annual Percentage Yield**
The annual reward rate for MARQ stakers compounded 3 times a day. Hence, the total number of epochs used to compound the return is 365\*3=1095, and the APY can be calculated below:
The power of compounding will increase the value of stakers’ assets exponentially.
**MARQ Supply per Epoch**
The protocol distributes part of newly minted MARQ to stakers, denote by, which is calculated according to the following equation:
where is the residual of total MARQ supply, is the reward ratio which is determined by the protocol and DAO governance.
# DAO Governance
gMARQ holders have the voting right to participate in Marquee governance. Potential proposals include but are not limited to token supply, distributing reserved assets to holders, frequency of supply changes, adjustment of parameters, etc. See below for some typical examples:
* **Determination of Marquee parameters:**
Parameters such as the transaction fee rate, interest rates, and variance of the value of assets insured.
* **Dividend Distribution:**
The project yields will be distributed to token holders when such proposals are approved by DAO governance.
* **Secondary Offering of $MARQ:**
When liabilities of fund pools exceed assets, new MARQ supply can be approved by DAO governance.
* **Governance of Co-operating projects:**
DAO governance on Marquee also applies to co-operating projects.
* **Future Development:**
DAO governance decides the future direction of Marquee and the expenditure of its resources through voting.
# User Payouts
Users are our first priority. We ensure claimers are paid out through 4 layers: Insurance Premia, Fund Pool, Vault and MARQ token.
**1.Insurance Premia**
For the long-term operation of Marquee fund pool, the fund providers have certain advantages over insurance purchasers. Insurance premia is a compensation for providing liquidity into the fund pool and bearing the risk of claims. Therefore, this part of the fund will be used to pay the claims first.
2.**Fund Pool**
Fund providing is not a principal protected earn product. While earning a high yield by becoming the counterparty of insurance purchasers, fund providers also have the obligation to bear corresponding risks.
3.**Vault**
The maximum occupancy limit of the fund pool is 80%, and the other 20% is kept as the reserve. When 80% of the fund pool is not enough to pay for all outstanding insurance claims, the 20% in reserve can guarantee a high probability of compensation claims.Project return will also be used to pay claims. The ultimate return to Marquee comes from cooperating DeFi insurance projects. Returns generated from the projects are reserved in the vault. If the amount of assets fall under the liabilities in the fund pools, the protocol uses the reserved assets in the vault to provide extra liquidity.
4.**MARQ Token**
If there are extreme price fluctuations, there may be a situation where the entire amount of the fund pool cannot afford to pay for the claims, i.e., the fund pool is in insolvency. When this happens, Marquee will issue additional governance tokens and sell them in the market to repay the insolvent part of the fund pool to smooth the daily operation of the project. Marquee will repurchase governance tokens through project revenue when the project is running normally.
# Tokenomics
**MARQ**
MARQ is the native token issued by the Marquee insurance protocol. MARQ can only be minted or destroyed by the protocol. MARQ is backed by a basket of assets in the vault. Every one MARQ is backed by one USDT or other stablecoins. To support the parity between MARQ and USDT, whenever the price of MARQ drops below one USDT, the protocol will purchase MARQ from DEXs and destroy it. However, MARQ can be traded at a price higher than one USDT in the market. The market price of MARQ above USDT is determined by market supply and demand. The tokenomics model of MARQ is explained as follows.**The initial supply of MARQ is 2,500,000 tokens.The changes in circulating supply will vary depending on the number of tokens that get minted, vested & burnt.**
**Marquee Token Minting and Distribution Plan**\
The Marquee token, **MARQ**, adopts an innovative minting and distribution mechanism to ensure long-term stability and sustainable development of the platform ecosystem. The total supply of MARQ tokens is divided into two parts: **pre-mining** and **Bond-based sales**.
#### **Pre-mining Distribution:**
10% of the total supply is allocated to pre-mining, with the following breakdown:
* **5%**: Allocated to the MARQ pool to provide initial liquidity.
* **5%**: Reserved for institutional partnerships and market promotion.
The remaining **90%** of the tokens will be mined through **Bond-based sales**. The specific mechanism is as follows:\
For every **1 Bond sold**, **4 MARQ tokens** will be minted. The distribution of these newly minted MARQ tokens is as follows:
* **1 token**: Allocated to the Bond purchaser (i.e., Bond buyer).
* **3 tokens**: Distributed according to the predefined allocation ratio.
#### **3 MARQ Token Distribution Details:**
1. **20%**: Deposited into the treasury proportionally with Bond sales to serve as collateral for the MARQ pool.
2. **25%**: Allocated for Bond-based sales.
3. **3%**: Distributed as staking rewards through on-chain smart contract circulation.
4. **7%**: Allocated for transaction mining and on-chain smart contract circulation.
5. **20%**: Reserved for marketing, listing, institutional partnerships, and team incentives.
6. **25%**: Added to the liquidity pool.
#### **Conclusion:**
This minting and distribution mechanism ensures that the token allocation aligns with the sustainable growth of the Marquee ecosystem. The Bond-based sales mechanism continuously injects liquidity and support into the ecosystem while incentivizing early participants and strategic partners.
****The mint & burn is an automatic mechanism that increases the sMARQ balance in a staker’s account. When the protocol mints new MARQ, a significant portion will be distributed to stakers. Since the staker will only see the balance of sMARQ instead of MARQ, the protocol uses the mint & burn mechanism to increase the MARQ balance so that the number of sMARQ always equals the number of MARQ. The current minting epoch is set to 8 hours, meaning that minting happens thrice a day.
#### Stake MARQ (sMARQ)
By staking MARQ in the Marquee stake pool, stakers receive sMARQ and 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. For more details, please refer to [Stakers](https://web.archive.org/web/20231208031030/https://docs.marquee.fi/earn#stakers).
#### Governance MARQ (gMARQ)
Since the amount of sMARQ is affected by the mint & burn mechanism, gMARQ is created to track the real-time valuation of sMARQ. The holder of sMARQ can choose to wrap their sMARQ for gMARQ, which is the governance token of Marquee and receives the Base Staking Rate. This rate intends to reflect the expected growth of the protocol.How does gMARQ work?
* When you wrap sMARQ, the quantity of gMARQ you receive is equal to sMARQ divided by the Index.
* Assuming the index equals 10, you will receive 1 gMARQ by wrapping 10 sMARQ.
* Assuming the index equals 10, you will receive 10sMARQ by unwrapping 1 gMARQ.
**Index**
The Index tracks the amount of MARQ accumulated since the beginning of staking. The index increases after every income distribution. Assuming the index is equal to 10, if a user stakes 1 MARQ from launch, the user will now have 10 MARQ.
# IPST
IPST is the platform's liquidity provider token.
Marquee can incentivize fund provision in the insurance fund pool by issuing Insurance Pool Share Token (IPST). There are two types of IPST for two types of insurance products.
1. 1.The first is **index-related insurance**, which relies on the price of assets (e.g. NFTs, cryptocurrencies, and traditional assets). The IPST token of this type of insurance is called Price Pool Share Token (PPST).
2. 2.The other is **contract insurance**, which is based on the contract of events (e.g. tsunamis, earthquakes, pandemics, cyber-attacks). The IPST token of this type of insurance is called Contract Pool Share Token (CPST). This token is the counterpart of LP tokens in DEXs.
The price of IPST is linked with MARQ, so the vault also backs its value. There is also a five-day locking period to prevent malicious sell-off.The value of IPST is determined by the following:
where TVUP is the total value of USDT in the fund pool, TVIC is the total value of the current insurance contracts &is the total amount of user-generated LP tokens.Since the value of each insurance contract will fluctuate in real-time due to the fluctuation of the currency price, the value of IPST will also fluctuate. After the user deposits USDT into the fund pool, the total value of Marquee insurance contract fluctuates, which affects the price of IPST. The real-time value of IPST reflects the overall profit/loss situation of the fund pool in real-time.
# Roadmap
# Audit