VESQ is a decentralized reserve currency protocol available on the Polygon (MATIC) Network based on the VSQ token. Each VSQ token is backed by a basket of assets (e.g. FRAX, MATIC) in the VESQ treasury, giving it an intrinsic value that it cannot fall below. VESQ also introduces unique economic and game-theoretic dynamics into the market through staking and bonding.
Our goal is to build a policy-controlled currency system, in which the behavior of the VSQ token is controlled at a high level by the DAO. In the long term, we believe this system can be used to optimize for stability and consistency so that VSQ can function as a global unit-of-account and medium-of-exchange currency. In the short term, we intend to optimize the system for growth and wealth creation.
The main benefit for stakers comes from supply growth. The protocol mints new VSQ tokens from the treasury, the majority of which are distributed to the stakers. Thus, the gain for stakers will come from their auto-compounding balances, though price exposure remains an important consideration. That is, if the increase in token balance outpaces the potential drop in price (due to inflation), stakers would make a profit.
The main benefit for bonders comes from price consistency. Bonders commit a capital upfront and are promised a fixed return at a set point in time; that return is in VSQ and thus the bonder's profit would depend on VSQ price when the bond matures. Bonders benefit from a rising or static VSQ price.
Currently most of the decisions are taken by the core team, but we expect to be able to turn this into a DAO-governed model as soon as possible!