Quasar & Crew³ Bounty Quests - Step by step for participations.
What is Quasar?
Quasar is a decentralized peer-to-peer gateway to IBC-enabled yield generation which solves liquidity, capital aggregation and volume inefficiencies through a single solution. It will serve as the premier hub that allows Liquidity providers (LPs) to provide capital and aggregate yield through active management across the Cosmos ecosystem controlled by Quasar Token holders.
Background
Ethereum’s DeFi boom owed its success to the advent of primitives like decentralized exchanges, which employed automated market makers (AMMs) compared to the order book system. Liquidity pools through automated market makers allowed for simple token swaps, which many users saw as an excellent way to generate yield through liquidity provisioning (LPing) to these AMMs. But as DeFi was still growing, two challenges became apparent: the need for an interface where liquidity providers (LPs) could deposit large token sums and easily execute complex financial strategies. This becomes even more important as LPs are always looking to capitalize on yields across different chains from a singular position, another hurdle for LPs.
Protocols with vaults that allowed LPs to deposit large volumes acted as a buffer for LPing. LPs could employ these vaults to execute complicated and multi-faceted strategies without facing time and transaction-fee related barriers, which prevented users from performing them independently. Consequently, the earnings from yields increased greatly, as did the liquidity within these ecosystems.
However, the opportunity to realize the best yield across different blockchains and layers in an interoperable manner has remained a challenge. Economic activity on siloed blockchains like Bitcoin and Ethereum is confined to their chains. On the other hand, Cosmos has constructed the framework for a globalized interconnected economy by developing open-source tools like Tendermint, the Cosmos SDK, and the Inter-Blockchain Communication protocol (IBC).
The Problem
Cosmos consists of a network of different blockchains or as the Cosmos team has framed it, “an internet of blockchains”. Cosmos has attracted the attention of DeFi developers looking to build cross-chain enabled protocols and has surged in TVL surpassing $20 billion. This framework allows IBC-enabled blockchains to natively support cross-chain communication and transfers within the Cosmos ecosystem, but it also led to fragmented liquidity amongst protocols within its ecosystem.
The fragmentation of liquidity becomes a larger issue as the Cosmos ecosystem continues to grow and is a key problem that can be solved through Quasar’s solution that we will cover throughout the article. The clustered nature of the Cosmos ecosystem has led to relatively low liquidity and capital inefficiencies amongst blockchains in the ecosystem.
Osmosis is an advanced AMM protocol built using the Cosmos SDK. The governance token of Osmosis, $OSMO, allows holders to decide on strategic upgrades and functionalities for the ecosystem such as voting on protocol upgrades, allocating rewards for LPs and setting the base network fee. Osmosis has a tremendous value-add to the Cosmos ecosystem but is currently not being utilized to its full potential.
It is important to remember that AMMs, such as Osmosis for Cosmos, usher in a new wave of utility within DeFi ecosystems and become ever more important as the TVL continues to grow. This growing TVL, facilitated by Osmosis, poses other challenges such as low volume in correlation to TVL and low percentage of TVL in stablecoin strategies compared to popular AMMs like Sushiswap and Uniswap.
Moreso, the Osmosis ecosystem has no multi-vault platform that allows for the execution of complicated cross-chain strategies that users could deposit liquidity into in large volumes. Quasar eliminates these capital inefficiencies by allocating liquidity to balance the liquidity pools.
The Quasar Solution
Quasar is an application-specific capital management blockchain launching in the Cosmos ecosystem. Our first product is an IBC-enabled multi-vault strategic investment platform. This is novel to the Cosmos ecosystem, which currently lacks even a vault protocol. Leveraging Quasar, users will gain access to yields across every IBC-compatible blockchain.
Quasar presents LPs with options to choose which vault to deposit their tokens through single-sided asset staking. In return, LPs can harvest better yield equivalent for depositing LP tokens in any available liquidity pool. Each vault in Quasar represents a different strategy that is executed in an automated workflow. Vaults will span various services, like yield generation and collateralized loans, while also focusing on other ecosystems and chains.
Quasar will also allow for complete self-governance using $QSR — Quasar’s native token, giving the community DAO powers to determine the future outlook of vault strategies. Quasar is uniquely positioned within the Cosmos ecosystem to capture significant traction in an ecosystem that is fragmented by design. With Quasar’s unique position within Cosmos and tapping into the IBC, it becomes the hub that helps other blockchains efficiently bootstrap liquidity.
Quasar’s first-mover advantage and model positions it to easily capture significant value within the Cosmos ecosystem. Moreso, integrating Quasar with Osmosis early on in its first phase, helps drive further volume into Osmosis’ significant TVL, allowing it to become a major repository for liquidity to help with low slippage and efficient capital allocation. This will solve undesirable volume and slippage issues by bringing capital efficiency and liquidity for LPs to easily execute sophisticated strategies. It is important to note that the first vault for yield aggregation will be implementing strategies from Osmosis. This will enhance the capabilities that Osmosis can provide to ultimately unlock its full potential within the Comsos ecosystem.
Self-governed strategies on Quasar
Quasar will become a platform that allows LPs to run self-governed vault-based investment strategies. This feature allows any user to freely add new vault strategies for liquidity providers on Quasar, by such means, diversifying choices for stakers. Users will be able to add strategies, in a permissionless way, ranging from cross-chain yield aggregation to future products like bonds and collateralized loans.
$QSR lockers will have voting power and fee revenue from performance fees. Additionally, this model will result in a receipt token that is unique to each user, resulting in a transferable, locked position. These locked positions will determine the overall emissions allocated for a specific period of time for the Quasar protocol. Ultimately, this feature will allow users to help create a balance between protocol emissions and the share of locked LP funds.
Conclusion
Quasar recognizes the surge of retail interest in the Cosmos ecosystem and the necessity of capitalizing on these opportunities. The Quasar vision is to become the epicentre for maximized interchain yield strategies and drive new liquidity to the Cosmos ecosystem. By allowing LPs to deposit tokens into vaults where each represents a different strategy, user experience is driven forward for the Cosmos ecosystem, and liquidity growth given an accelerated trajectory.
Stay tuned for the launch of an active management and yield aggregation platform on Cosmos!
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