PARSIQ’s new IQ Protocol

3 min readDec 11, 2020

PARSIQ is proud to announce the new lending and borrowing protocol, we’ve previously called the “O2 Protocol”.

IQ Protocol

This protocol was developed on the basis of giving back to our community and to the whole crypto space. We will be allowing all DeFi projects to utilize this model.

For PARSIQ, the model works together wíth our subscription services like this:

There are three levels of service, we’ve dubbed it a “Threemium model”.

- A free model — with limited usage, for testing out the platform.

- A premium model — where we accept most major cryptos, PRQ and Fiat as payment. The vast majority of this payment is converted into the IQ Protocol for borrowing. More info on details will be shared shortly.

- A “Hodlium” model — where you can hold PRQ and use many of our services for free.

Our entry into the DeFi world

The Hodlium model allows us to expand into DeFi territory with a completely new lending and borrowing model, that we would like to present to you here.

How it works

PARSIQ will be creating a pool attached to an audited smart contract, much like you may know from Uniswap, although this pool doesn’t require it to be matched by another token, as for example Uniswap, so you only supply the PRQ token you want to lend to others.

If you lend your PRQ to the pool, you will be issued iPRQ (interest PRQ) as proof that you have placed PRQ into the pool. As the name suggests, you earn an interest on your PRQ if someone else borrows them from the pool. The interest is variable and paid out daily at a fixed time — more info to come.

Now if another user wants to borrow from the pool, they will need to pay a fee — this is where our protocol differs from most other DeFi protocols out, there, because as a borrower, you will have no need for collateral, and so there is no risk associated with borrowing. The fee will be determined from how much and for how long they would like to lend the PRQ and looking at the amount borrowed from the pool already — the more borrowed the higher the fee.

Once the fee is paid in either PRQ, ETH or USDT, the borrower is issued qPRQ (Quasi PRQ) along with an NFT token that defines the length and volume of PRQ borrowed — almost like a rent agreement.

The qPRQ cannot be transferred nor traded. If you move the NFT token attached to it, the qPRQ tokens will transfer along with it.

Once the NFT token’s rent period is over, the qPRQ needs to be burned. This can be done either by the borrower or by the community for a small profit.

When the borrower enters an agreement, there is a fee paid and a small deposit of ETH for burning the qPRQ when the rent period is over. The borrower can reclaim this ETH or the community can do it for them, provided there is proof on chain that the tokens have been burned. This means there is also an opportunity to be a “cleaner” on the network and collect small fees for each expired contract that has yet to burn their tokens.

There is even a function to return the borrowed qPRQ along with the NFT to the pool, in case you found out that you didn’t need it as long as you initially thought or you didn’t need as many tokens to complete your work. So if you returned the full amount to the pool after say half the borrowing period had elapsed, you would get approximately half your paid fee returned, along with your deposited ETH.

The lender always gets their interest paid in more iPRQ, so that you can either withdraw PRQ from the pool or let your portion in the pool just keep growing.

Everything will be verified via the Merkle tree structure that will be published for all to see and to redo calculations if they so wish to do this.

The Community Touch

The protocol isn’t set in stone yet and is still subject to change. We would like to invite anyone from our community to bring forward good ideas for changes or additions to the protocol as described above.