Quanto Liquidity Provider (QLP)
The Quanto Liquidity Provider (QLP) is the core liquidity engine powering trading on Quanto.trade.
Overview
The Quanto Liquidity Provider (QLP) powers trading on Quanto.trade by serving as the platform’s primary market maker. It ensures deep, consistent liquidity across all listed pairs, enabling minimal slippage and instant execution.
The QLP earns 50–300% estimated APY, paid in $QTO, for its participants.
Core Functionality
The QLP places passive limit orders in Quanto’s order books.
When a trade matches with the QLP’s order, the QLP takes the opposite side of the position. Example: If a user market buys 1 BTC, the QLP sells 1 BTC and holds a short position.
This mechanism ensures frictionless execution, even during low organic order flow.
Funding Fee Model
The QLP earns hourly funding fees from traders holding open positions against it, calculated from:
Position size (notional value).
The pair’s prevailing funding rate.
These fees, plus the QLP’s trading PnL, form the rewards distributed to stakers.
Staking into the QLP
You can stake QTO, QSR, or other supported collateral into the QLP:
QTO/QSR staking:
Earn QLP yield in $QTO.
Receive $QLP tokens (1:1 ratio to staked value) that can also be used as collateral to trade on Quanto Perpetuals.
Non-QTO assets (e.g., ETH, BTC, SOL):
Earn QLP yield in $QTO.
No $QLP tokens issued for trading collateral use.
Risk: All principal is at risk—losses in QLP trading are socialized across the pool.
Loan-to-Value (LTV): Each collateral asset has a set LTV. Example: ETH at 90% LTV means $10 ETH counts as $9 staked value.
QLP Borrowing & Looping
The latest update enables borrow-and-stake mechanics for enhanced capital efficiency.
How it Works:
Stake any supported collateral (e.g., ETH).
Instantly borrow QTO against your staked collateral (e.g) at your chosen LTV (zero interest).
Stake borrowed QTO into the QLP and get $QLP tokens, earning yield and continue to use $QLP as collateral.
Loop: Use the $QLP from step 3 as collateral to borrow more QTO, stake again, and repeat.
Example Looping Flow (60% LTV):
Stake 100 QTO into QLP.
Borrow 60 QTO using your QLP.
Stake 60 QTO → get 60 more QLP.
Borrow again (36 QTO), stake again → total ~196 QLP from the original 100 QTO.
Liquidation Mechanics
Liquidation occurs if collateral value drops or QTO price rises beyond your LTV threshold.
Avoid liquidation by adding collateral or repaying part of the borrowed QTO.
Why Looping Matters
Capital Efficiency: Earn on idle collateral while maintaining position flexibility.
Boosted Yield: Compound exposure to QLP rewards without new capital.
Custom Leverage: Adjust borrow levels anytime to control risk/reward.
Operational Details
Rewards: Distributed in $QTO.
Deposits/Withdrawals: Processed within an hour.
No Fees: For staking or unstaking.
Transparency: Live QLP positions visible in real time.
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