IQ Protocol 101: Collateral-less, Risk-Free Asset Renting and Staking Possibilities
Everything you need to know about DeFi’s first blockchain agnostic framework for NFT renting and blockchain-based subscriptions.
Enabling everything from NFT renting to blockchain subscriptions, IQ Labs and its IQ Protocol is well positioned to help the blockchain industry further advance into the Web3 world.
At launch in beta on June 30th, 2021, the IQ Protocol introduced a new token economic model for PARSIQ — one which benefits the three main groups of a project’s token: service users, investors, and traders.
Less than six months into launch, the IQ Protocol has seen more than 50 million PRQ in total value locked (TVL), and has generated more than 300,000 PRQ in rental fees, with strong and steady growth across each of the months.
Since the launch, the IQ Protocol has been making headlines on a weekly basis. More than 30 projects have signed up to implement IQ on their own platforms — many of whom are eager to realize the benefits enabled by NFT renting. Several more projects are expected to commit to IQ in the months ahead, looking to implement blockchain subscriptions on their platform, or to also enable the renting of NFTs.
Motivated by the increasing interest and demand for the IQ Protocol, the evolution of the Decentralized Finance (DeFi), and NFT renting industries, the soon to be released IQ Protocol token (IQT) was seen as a logical and progressive next step for the revolutionary product.
- Launched in beta on June 30th, 2021.
- Previously overseen by PARSIQ team, which was the first “client” to IQ Protocol, enabling its clients to use PARSIQ monitoring services by renting wrapped expirable PRQ token.
- 300,000+ PRQ generated in rental fees for the stakers since July.
- 30+ companies in the pipeline, including Coreto, Mysterium, Solcery and Sator.
About PARSIQ
Founded in 2018, PARSIQ is a Binance-backed blockchain monitoring and workflow automation platform that serves as a multilevel bridge between blockchains and off-chain applications. Its mission is to help foster the mass adoption of blockchain and cryptocurrency technologies by enabling businesses handling cryptocurrencies to realize enhanced regulatory compliance.
About IQ Labs
Launched recently to take over the continued development and deployment of the IQ Protocol (previously overseen by PARSIQ), this new, separate entity will be leading the way in blazing a path towards crypto subscription services and risk-free, collateral-less loans in a decentralized world.
👾 Solution for NFT Renting
Under the context of NFTs, IQ provides the capabilities to create NFT “renting pools” — digital spaces which will allow for participants to lend and rent NFTs. Users who rent NFTs from the renting pool will obtain real digital access to these NFT assets — such as avatars, wearables/skins, and in the world of online gaming, in-game assets like weapons, property, or other valuables.
This solution completely reimagined how NFTs can be consumed by the public. No longer will it be necessary for a user to spend hundreds or even thousands of dollars to get a hold of a digital asset. Instead, NFT owners can deposit their digital assets into an IQ renting pool, and make them available for rent.
Interested parties can rent the asset of interest (avatar, digital skin, etc…) to at least give it a try. After using the asset, further consideration can be taken as to whether or not the renter may want to purchase the asset on their own.
Besides the practicality of this solution, it also allows many users to experience online luxury like never before. Taking Beeple’s Everydays digital art as an example, its current owner, Metakovan, is not able to actively monetize the artwork. However, putting “Everydays” on IQ would allow interested parties to rent the NFT — streaming renting funds to Metakovan, while also allowing another person to enjoy the work of art while the owner continues to hold possession of the original copy.
Under this new model, an entirely new NFT consumption economy is born — benefitting all parties who participate in this new process.
In a NFT gaming example, the obvious benefits of IQ Protocol…
…for game creators:
- A circular economy for NFTs. Think “stake to earn” and “play to earn” conveniently offered in one gaming ecosystem.
- Offer flexible payment modes. The game provider can charge a fee for the renting feature, stake the NFTs themselves, or both.
…for players:
- Try before you buy. Rent an NFT before committing to buy at full price.
- Borrow power-ups. No need to permanently buy a new NFT, when you can just rent it for a specific duration.
- Earn rewards by staking NFTs. Lease your NFTs to other users and earn on renting fees.
🧠 Solution for fungible token renting and fixing tokenomics
Besides providing capabilities to overhaul existing tokenomics models, IQ provides the framework which enables blockchain subscription services on-chain, which has never been seen before. Further, this model can make such services possible without the need for user collateral or locking of funds.
PARSIQ has successfully done this with its own services. From the PARSIQ dashboard, users are able to configure either an automated or manual subscription to PARSIQ’s offerings and manage their subscription just as they would with a traditional offering in the Web2 world.
The capabilities enabled by such a framework on the blockchain are extremely powerful. With more than 30 projects in line waiting to be on-boarded, IQ’s partners agree that blockchain subscriptions are a paradigm shift for the subscription economy.
Built to be flexible, cheap, and blockchain agnostic, IQ is the solution for all projects looking to improve and streamline experiences for users on their respective platforms. In a world where simple transactions on the blockchain can result in ETH fees totaling in the hundreds of dollars, it is essential that the barrier to entry (to participate on a platform, to transact, to interact) be lowered. Recognizing this, IQ was designed with these goals in mind. For that reason, IQ first launched on the Binance Smart Chain, with EVM compatibility considered — and will soon be found on Polygon and Solana as well.
With IQ, no need to think about how to implement complex tokenomics when issuing tokens. It’s very easy to have proper tokenomics ready to customize and deploy.
- PARSIQ’s SaaS Model Via IQ Protocol
- Introducing $MYST Tokenomics 2.0, powered by the IQ Protocol
- IQ Protocol for NFT Renting
- IQ Protocol for Crypto Companies & Token Not Needed
📌 Links and resources
How it works
IQ Protocol considers two categories of participants — token holders and customers (renters/borrowers). While incentives for both categories of participants differ, both parties can enjoy significant benefits by participating.
For projects who deploy renting pools on IQ Protocol, token holders participate by staking tokens. This is done in an effort to earn passive income, paid in the form of interest. Customers of the renting pool fund the interest earned by the token holders. By paying a premium through renting, customers minimize price volatility risks which comes from holding the crypto token outright.
PRQ token holders stake in PARSIQ’s renting pool. In doing so, these individuals earn auto-compounded rewards, funded by customers who rent from the pool.
When PRQ is deposited into the pool, the protocol issues a single NFT (called iPRQ) to the depositor in return. This NFT represents the depositor’s asset stake in the pool, and is mutable — meaning that if the depositor withdraws or deposits additional PRQ into the pool, the asset stake represented by the single iPRQ NFT changes.
However, barring a complete withdrawal of the asset stake in the pool, it is important to note that no additional iPRQ is issued to, or returned from, the depositor regardless of subsequent deposits or withdrawals.
On the client side, customers can rent wrapped expirable versions of PRQ tokens directly from the renting pool. Customers currently pay with PRQ or through fiat from a credit card. In the future, payment through stablecoins, ETH, BNB, and other popular cryptocurrencies will also be made available.
The price for renting assets from the pool is determined via a method known as Automated Interest Rate Discovery (AIRD), a concept created by the IQ Labs team. AIRD works similar to the Automated Market Maker (AMM) concept, which is utilized in popular decentralized exchanges like Uniswap and PancakeSwap.
At a high level, prices are determined from available supply and demand, alongside principles developed by IQ Labs associated with bonding curves and bonding rules.
In a simple example, as more tokens are rented from the pool, the more expensive it will be for customers to rent. The principles put in place through IQ make it such that demand can never exceed supply — thereby always ensuring that the pool remains liquid.
As the price for renting rises, token holders have the potential to earn higher rewards. The potential for higher returns leads to the acquisition of more PRQ tokens to deposit and stake into the pool.
Increased demand in PRQ tokens drives up the overall PRQ price in the global marketplace. However, such pricing volatility is offset in the context of the services being provided by a project because the services pricing associated with the native token will decline (as it has taken into account an increase of the token price in the marketplace).
Example:
A service costs $100 to use. At the time this pricing is determined, 1PRQ = $1, so 100 PRQ is needed to purchase the service. As a result of greater demand on the token, two months later, 1PRQ = $2. However, the stablecoin cost of the service remains $100, and so only 50 PRQ is needed to purchase the same service two months later.
Such an arrangement creates natural equilibrium and fair pricing models, ensures that customers do not overpay in the event of market fluctuations, but also continues to allow token holders to reap the benefits of staking and earning rewards.
IQ Enables Collateral-Less, Risk-Free, NFT Renting and Lending Possibilities
The preceding sections predominantly covered the renting of fungible tokens only. However, while finalizing the first version of IQ Protocol, a realization came that the applications initially laid out in IQ could also be applied to Non-Fungible Tokens via NFT renting.
Instead of depositing fungible tokens, projects could allow token holders to deposit NFTs. In turn, customers could seek specific NFTs and enable NFT renting of wrapped versions of the deposited NFT — thereby enjoying the utility derived from the NFT for a set amount of time. NFT depositors can then earn rewards (rental fees) through NFT renting, all while knowing that their original asset is safe.
The concept for NFT renting is in place — with production having begun and the first tests set to begin in Q1 2022. For most NFTs today, these digital assets are sitting idle in wallets — seldom used and only waiting for the day that their value appreciates before being transferred for a profit to someone else.
With IQ, a massive market for passive income generated through NFT renting is about to be unlocked — wherein NFT holders can continue to hold onto their asset, but also generate passive income meanwhile they wait for it to appreciate. With the asset protected within the protocol for the holder, and no collateral needed for the renter, a new economy is about to be born on the back of IQ.
$IQT Token and Tokenomics
Following the launch of IQ Labs is the launch of the IQ Protocol Token (IQT). This token, which will introduce a DAO for its holders, will be leveraged in various ways to ensure the continued development, growth, and success of the protocol and IQ Labs in the years to come.
IQT is an ERC20 token which is set to launch during Q1 2022, with a planned total supply of 1 billion IQT. Distribution of the token will be as follows:
As noted above, IQT holders will be part of a DAO and have voting rights as it relates to the IQ Protocol ecosystem. DAO members will be able to cast votes on a wide variety of topics, including:
- Protocol development proposals,
- Admitting new partners to the IQ Partner Network (IQPN),
- Reward size and duration as it relates to liquidity mining,
- Protocol fees, and
- The determination of whether to burn IQT fees collected by the DAO or to leverage the fees in different capacities to further the development, growth, or earnings of the protocol.
How to get involved
- Stake PRQ in the pool to get $IQT airdropped.
Providing liquidity to the IQ Protocol in Q4 makes you eligible for a proportional allocation of the 1 million $PRQ reward pool, along with eligibility for an airdrop of the IQ Governance Tokens, expected to mint in the first half of 2022. - Join IQT Whitelist Program and help the community
In the run-up to the $IQT token launch, we are officially launching the Whitelist Program for the community to raise project awareness and help newcomers learn and get excited about IQ. - Follow IQ on socials
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FAQ
PRQ or IQT?
PRQ is PARSIQ’s utility token, which means it unlocks utility/services with PARSIQ.
IQ Protocol, even though created by PARSIQ, is going to be its own entity, with its own separate team(working closely with the PARSIQ core team) and its going to be governed like a DAO, which means it needs its own token, hence the launch of the IQ Token.
The IQ Token will have a different set of properties to the PRQ tokens, that we are still figuring out, but its all very exciting. You can invest in both, IQ Token will attract a completely new set of investors to those holding PRQ.
But the overall idea is that the IQ Token will be used to govern the IQ Protocol DAO, so it's truly the people that believe and invest in the project that decide which way it moves. This is also done from the perspective that it wouldn’t be fair to all the projects joining the IQ Protocol after PARSIQ in terms of earning IQT through incentives etc. on the platform.
When we get closer to the IQ Token launch, we will have a complete(at that point) description of what the IQ Token unlocks.
But we will not forget where we came from and the PARSIQ community support we’ve seen will be rewarded at the birth of IQT.
PARSIQ or IQ Protocol?
IQ was initially built with the idea of creating an ecosystem for PARSIQ. The goal of this ecosystem was to design a model where the three most common categories of token holders: service users, investors, and traders, would all be satisfied.
IQ Labs was launched recently to take over the continued development and deployment of the IQ Protocol (previously overseen by PARSIQ), this new, separate entity will be leading the way in blazing a path towards crypto subscription services and risk-free, collateral-less loans in a decentralized world. Enabling everything from NFT renting to blockchain subscriptions, IQ Labs and its IQ Protocol is well positioned to help the blockchain industry further advance into the Web3 world.
When IQ Token?
IQT is set to launch during Q2 2022, with a planned total supply of 1 billion IQT.
