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AQ1

Overview

AQ1 are 1,000 ERC-721 tokens backed 1:1 by a 0,1% stake in a protocol reserve that accrues royalties earnings.
Aliquo introduces a simple flywheel mechanism that makes the protocol collect the earnings from royalties over secondary sales of AQ1, which are allocated at the AQ1 Vault to back the floor price of AQ1 itself. In its turn, AQ1 Vault collateralizes the floor price of AQ1 with a theoretical ratio of 1:1 between the vault ETH value (100%) and the supply cap of AQ1 (1,000).
Example of AQ1

Key Features

Royalties as Liquidity (RaL)

By default, AQ1 has 10% of royalties over secondary sales. 100% of the earnings captured by Aliquo are accrued in the AQ1 Vault.
Through a flywheel mechanism, Aliquo instantly adds the profit earned from royalties over secondary sales of the entire token supply of AQ1 back to the principal amount of the tokens, providing a long-term, virtuous cycle of compounding the backed floor price of AQ1.
With royalties over secondary sales serving as Aliquo’s core stream to provide protocol-owned liquidity, Royalties as Liquidity (RaL) is the token feature that makes the entire token model design of AQ1 structurally viable, economically sustainable, and conceptually plausible.

Reserve-Backed

Each AQ1 is collateralized 1:1 by a 0,1% stake in the AQ1 Vault (100%/1,000). AQ1 Vault, the protocol reserve to which the earnings from royalties over secondary sales of AQ1 are allocated, is fractionalized with a theoretical ratio of 1:1 between the vault’s assets value (100%) and the NFT supply cap (1,000).
In the end, in addition to providing intrinsic, on-chain proven value, Reserve-Backed provides — as a token feature — a predictable, tangible, and palpable unit of account for AQ1: ‘Collateralized 1:1 with a 0,1% stake in the AQ1 Vault’.
As a protocol standard, AQ1 must be always measured in ether (ETH).

Proof of Value (PoV)

Proof of Value (PoV) is the method to audit the backed floor price of AQ1. It works as a due diligence process where anyone can verify AQ1 Vault’s ETH value in the root, tracking it on block explorers.
Through an on-chain verification of the AQ1 Vault, anyone can calculate and attest the 0,1% stake collateralizing 1:1 the backed floor price of AQ1.

Non-Inflationary

AQ1 is non-inflationary, having a hard cap supply of 1,000. This means after the entire token supply of AQ1 is minted, the smart contract permanently cease the token emission. Immutable, the supply cap of AQ1 is embedded in its smart contract code, being publicly verifiable and attested by anyone.

Protocol Ensured Value (PEV)

100% of the holdings of AQ1 Vault are employed to collateralize the backed floor price of AQ1.
As a protocol standard, AQ1 must be always measured in Ether (ETH). Based on the fact that Aliquo does not sell funds from the AQ1 Vault’s balance sheet and there’s no new token issuance after the 1,000 AQ1 becomes minted, it’s correct to assume that the backed floor price of AQ1 does not fall below its current ether value. For example, if each 0,1% stake in the AQ1 Vault backing 1:1 the floor price of AQ1 currently equals 0.03 ETH, it is guaranteed that such amount of ether is the current Protocol Ensured Value (PEV) of each AQ1, not falling below.
Thus, Protocol Ensured Value (PEV), as a token feature, provides ERC-721 tokens the capability to maintain (retain) or increase (compound) their backed floor price.

Auto-Compound

AQ1 is an auto-compound ERC-721 token.
The core of the auto-compound interest of AQ1 occurs by increasing and leveraging the backed floor price of the NFTs themselves, automatically adding earnings from royalties over secondary sales of the protocol-native tokens to their backed floor price — with the resulting compounded backed floor price of each NFT becoming principal for the next cycle.
Distinct from traditional market strategies, on which compounding events takes place weekly or bi-weekly, the compounding of AQ1 occurs every time a secondary sale takes place, paired with the NFT trading activity, i.e., every secondary sale of AQ1 can be interpreted as a compounding event to the entire token supply.
The 10% royalty fee earned in each secondary sale of AQ1 is equally dissolved among the entire token supply.
  • e.g., if 0.01 ETH becomes collected in a single secondary sale of AQ1, 0.00001 ETH becomes automatically accrued in each AQ1.

Free-Floating

AQ1 is a free-floating ERC-721 token. This means each NFT is free to trade above 0,1% of AQ1 Vault, at a premium.
Aliquo does not impose any upper limits on the price ceiling of AQ1. In other words, the exchange rate of AQ1 is allowed to float due to market forces without the intervention of Aliquo, and, on the other hand, always keeping a 0,1% stake in AQ1 Vault that defines the minimum price of each AQ1.

Governance Token

AQ1 serves as Aliquo’s governance token via Aliquo DAO. The membership of the DAO is based on anyone holding at least one AQ1.

On-Chain Storage

AQ1 is fully generated and stored on-chain. No third-party servers become used to store the metadata and visual output of each AQ1 — the Ethereum blockchain is the data store.

Visual Output

At the time of minting each AQ1, a randomly generated string becomes engraved on each NFT visual output. Each string is unique, made of 36 binary numbers, being divided into 6 rows.
10 11 00 11 01 10
00 01 10 01 10 10
01 11 01 00 10 01
10 10 00 01 11 01
01 00 10 11 11 00
11 01 00 10 10 01
AQ1 is fully open-sourced. Anyone can review the battle-tested smart contract here.