Protocol Economics
Expansion & Contraction Phases
The $GRQ peg token is designed to stay close to the value of $BERA, typically between 0.9 and 1.1. When $GRQ moves outside this range, the protocol enters either Expansion or Contraction mode — each with its own rules and emission dynamics.
Economic Cycles
The GRQ protocol is designed to operate through economic cycles that respond to market conditions:
Expansion Cycle
When GRQ trades above its 1 BERA peg, the protocol enters an expansion phase:
- New GRQ is minted according to the protocol's expansion rate
- Minted GRQ is distributed to sGRQ stakers in the Pyramid Lounge
- bGRQ bonds can be redeemed for GRQ, often with a premium
- This creates a sustainable reward mechanism for long-term participants
Contraction Cycle
When GRQ trades below its 1 BERA peg, the protocol enters a contraction phase:
- No new GRQ is minted
- Users can purchase bGRQ bonds at a discount, which burns GRQ
- This reduces GRQ supply, helping to restore the peg
- Bond purchasers are incentivized to hold until the next expansion phase
Expansion Mode: Activated (>$1.01 BERA)
When $GRQ trades above 1.01 BERA, the protocol enters Expansion mode.
Pyramid Lounge Activation
The Pyramid Lounge (Boardroom) becomes active, allowing stakers to earn rewards.
Emission Schedule
Stake $sGRQ to earn $GRQ emissions that flow every 6-hour epoch.
This is the high-energy phase where passive income flows — but with mechanisms in place to ensure things don't overheat.
Contraction Mode: Controlled Cooldown (<$1.00 BERA)
If $GRQ drops below peg, the system enters Contraction mode to reduce excess supply and restore balance.
What Changes in Contraction:
- No $GRQ emissions from the Pyramid Lounge
- $sGRQ emissions from farms continue at a reduced rate
- Emissions are dynamically adjusted to defend the peg
These systems are designed to ease the protocol back to equilibrium — without sharp shocks or instability.
Phase Summary
- Expansion Mode (>$1.01): Stake $sGRQ to earn $GRQ from the Pyramid Lounge.
- Contraction Mode (<$1.00): Emissions reduce or pause to control supply.
- Equilibrium (1.00 – 1.01): No emissions; system is stable.
Revenue Model & Protocol Sustainability
The GRQ protocol implements a minimal contribution structure designed to ensure long-term protocol health while maximizing user value:
Genesis Pool Contribution
A modest 1% contribution from Genesis Pool deposits directed towards Lambo Fund (50%) and ecosystem growth (50%)
Fee-Free Activities
No additional fees on regular farming activities, withdrawals, or reward claims
This balanced approach ensures protocol sustainability through strategic token allocation and minimal revenue generation, prioritizing value creation for participants across the ecosystem.