# How QiDAO Can Use Its Qi Gauge System For Protocol Revenue & Long-Term Sustainability

**Published by:** [vLabs](https://paragraph.com/@vlabs/)
**Published on:** 2022-07-26
**URL:** https://paragraph.com/@vlabs/how-qidao-can-use-its-qi-gauge-system-for-protocol-revenue-long-term-sustainability

## Content

ProposalChange the emission model of QiDao into a LP based gauge system instead of incentivising borrowers of MAI.Current Scenario:The current system is being manipulated by whales who own a large enough share of the outstanding MAI debt for a particular vault and as a result, makes it profitable to bribe using $Qi as they will always make a profit as the $Qi emissions to their vault is much higher than the bribe amount. As a result, these whales do not even have to LP with the borrowed MAI (Best interest of the community for deep MAI liquidity) as they can just sell the excess $Qi to make profits. The entire debt ceiling is also snipped by the whales and as a result it becomes even more profitable for them to bribe week-on-week and the negative feedback loop continues.SuggestionsA shift to a gauge based system in which the eQi holders vote for which pools get $Qi rewards. This will force the whales to LP and have “skin in the game”. eQi holders would get boosted rewards similar to veCRV holders and the logic for the boost would be the same: Each pool that is currently under the “FARM” section of QiDao would start out as a gauge. eQi voters get to decide the weight that each gauge gets and those weights represent how much of the daily $Qi inflation will be received by the liquidity gauge. New gauges can be added and existing gauges can be removed if it does not provide sufficient protocol revenue. This would help eQi holders to vote for the pools that they LP in. Similar to Curve, eQi would allow you to acquire voting power to participate in the DAO and earn a boost which is = to your Qi Powah Boost which would be a function of both your eQi lock duration and share of MAI held in LP / Total value of LP.Proposed Model:Protocol Revenue:All fees collected from $MAI repayments, farms and open market operations can be distributed to eQi holders in the form of MAI+3Pool3CRV instead of buying back $Qi. The main idea of not buying back $Qi is that the protocol would be utilizing a majority of its revenues to keep buying an “ASSET,” i.e $Qi, from the market which immediately becomes a “LIABILITY,” i.e. $eQI, once locked. Such a model keeps increasing the liabilities of the protocol without contributing anything to grow protocol revenue and hence is not sustainable long term.Pros of proposal:Reduce manipulation by whalesDecrease protocol liabilities by distributing revenue in MAI+3Pool3CRVMAI liquidity increases across all chains as it is the only way to earn $QiSince protocol revenue is sold for MAI+3Pool3CRV it could help with more more peg stabilityIncreased chances of bribes / vote incentives from different dAPPs, dexes and chains to vote for gauges and also adding new gauges.Cons of proposal:eQi stakers will no longer earn $Qi as protocol revenueeQi holders lose upside on $Qi price pump as all future earnings will be in stablesThere could be more sell pressure on $Qi from the gauges

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