QEURO Token

QEURO Tokenomics: Euro-Native Stablecoin Architecture

📋 Executive Summary

The Quantillon Euro (QEURO) represents a revolutionary approach to euro-denominated digital assets, combining the stability of traditional stablecoins with the innovation of decentralized finance. Designed as an overcollateralized, yield-generating stablecoin backed by USDC and governed through democratic mechanisms, QEURO solves the fundamental liquidity and adoption challenges facing Euro DeFi markets.

Our stablecoin architecture incorporates advanced mechanisms including overcollateralized minting/redemption via the QuantillonVault, delta-neutral hedging, and Aave v3 yield generation that delivers superior capital efficiency while maintaining regulatory compliance. The design prioritizes user experience, institutional adoption, and sustainable yield generation across diverse market conditions.

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Core Token Specifications

Technical Architecture

Parameter	Value	Rationale
Name	Quantillon Euro	Clear utility identification
Symbol	QEURO	Recognizable euro denomination
Standard	ERC-20 (UUPS Upgradeable)	Future-proof with security
Network	Base L2 (Primary)	L2 efficiency and lower costs
Peg Target	1 QEURO = 1 EUR	Direct euro denomination
Decimals	18	Full ERC-20 compatibility
Max Supply	1,000,000,000 QEURO	Governance-adjustable cap
Contract Type	OpenZeppelin + Custom Logic	Battle-tested + innovation

Implemented Features

• Oracle Integration: Chainlink EUR/USD and USDC/USD feeds with circuit breakers

• Slippage-Free Operations: Mint/redeem at oracle rates with 0.1% fees

• Emergency Controls: Pausable with time-locked upgrades via UUPS pattern

• Compliance System: Blacklist/whitelist functionality for regulatory compliance

• Rate Limiting: Protection against large-scale manipulation attacks

• Minting Killswitch: Emergency minting halt capability

🚧 Roadmap Features: Cross-chain bridging (Base, Arbitrum, Optimism) and multi-collateral support (ETH, WBTC) are planned for future phases.

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Stablecoin Mechanics & Architecture

Overcollateralization Model

📊 Collateral Framework (MVP)

Collateral Type	Status	Minimum Ratio	Accepted Assets
Primary	✅ Live	101%+	USDC

Note: Multi-collateral support (ETH, WBTC, governance-approved assets) is planned for future protocol upgrades.

🔒 Security Mechanisms

• Real-time Monitoring: Chainlink oracles with 1-hour maximum staleness

• Price Deviation Protection: 5% maximum price change tolerance

• Circuit Breakers: Automatic pause on oracle failures or extreme conditions

• Multi-Sig Controls: Time-locked upgrades for critical parameter changes

• Compliance Controls: Blacklist/whitelist address management

Minting & Redemption Process

📥 Minting Workflow (MVP)

User USDC → QuantillonVault → Oracle Price Check → QEURO Mint → Aave Deployment

1. USDC Deposit: Users deposit USDC to the QuantillonVault

2. Oracle Price Check: Real-time EUR/USD rate verification via Chainlink

3. Collateral Lock: Protocol enforces minimum collateralization ratio

4. QEURO Issuance: Vault mints QEURO at oracle rate minus 0.1% fee

5. Yield Deployment: Collateral automatically deployed to Aave v3

Important: Minting occurs via the QuantillonVault contract which holds the MINTER_ROLE. Users interact through the Vault interface, not directly with the QEURO token contract.

📤 Redemption Workflow

QEURO Burn → Oracle Verification → Collateral Release → USDC Transfer

Key Benefits:

• Zero Slippage: Oracle-based pricing eliminates DEX impact

• 24/7 Operations: No banking hours or geographic restrictions

• Instant Settlement: Single-block transaction finality

• Open Access: Any address can deposit/redeem via the Vault

Yield Generation Strategy

💰 Collateral Deployment

USDC collateral is deployed to Aave v3 on Base to generate yield. The deployment is managed by governance with the following constraints:

• Maximum Aave Exposure: 50,000,000 USDC (governance-adjustable)

• Harvest Threshold: 1,000 USDC minimum for yield harvesting

• Emergency Withdrawal: Available for crisis situations

Revenue Distribution Model (Dynamic YieldShift)

Aave Yield (Variable APY)
├── 10% → Protocol Fees (Treasury)
└── 90% → Dynamic Distribution via YieldShift
    ├── Users (stQEURO holders): 50-90% based on pool ratios
    └── Hedgers: 10-50% based on pool ratios

Note: The YieldShift mechanism dynamically adjusts yield distribution between Users and Hedgers based on pool utilization ratios. The base shift is 50% to users, with a maximum of 90%.

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Dual-Pool Architecture

👥 User Pool Mechanics

Primary Functions:

• QEURO Minting: Deposit USDC via Vault to mint QEURO

• Yield Earning: Stake QEURO to stQEURO to receive auto-compounding yields

• Governance Participation: Vote on protocol parameters via QTI

• Unstaking Cooldown: Configurable cooldown period for unstaking

Participation Requirements:

• Minimum Stake: Configurable via governance (minStakeAmount)

• Collateral Ratio: Protocol maintains 101%+ collateralization automatically

• Holding Period: 7-day minimum for yield claims (anti-manipulation)

🛡️ Hedger Pool Mechanics

Current Implementation: Single Hedger Model

Important: The MVP implements a single designated hedger model for simplified operations. Multi-hedger support is planned for future phases.

Hedger Functions:

• FX Risk Management: Delta-neutral EUR/USD exposure via margin positions

• USDC Provision: Deposits USDC margin for protocol collateralization

• Yield Optimization: Earns compensation from yield shift allocation

• Peg Maintenance: Economic incentives to maintain EUR stability

Compensation Structure:

Base Compensation: EUR/USD Interest Rate Differential
+ Variable Yield Shift: Based on pool utilization ratios
= Total Compensation (configurable via governance)

Risk Management:

• Margin Requirements: Configurable minimum margin ratio (minMarginRatio)

• Leverage Limits: Maximum leverage configurable by governance (maxLeverage)

• Auto-Liquidation: Triggered when position becomes unhealthy

• Entry/Exit Fees: Configurable fees for position management

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Yield Shift Mechanism

⚖️ Dynamic Equilibrium System

The Yield Shift represents QEURO's most innovative feature—automatically rebalancing incentives between Users and Hedgers based on real-time market conditions.

📊 Technical Parameters (Code Values)

Parameter	Value	Description
Base Yield Shift	50% (5000 bps)	Default allocation to users
Max Yield Shift	90% (9000 bps)	Maximum allocation to users
Adjustment Speed	100 bps	Rate of shift adjustment
Target Pool Ratio	100% (10000 bps)	Optimal user/hedger ratio
TWAP Period	24 hours	Time-weighted average window
Min Holding Period	7 days	Required for yield claims

🎯 How It Works

Pool Condition	Yield Shift Direction	User Impact	Hedger Impact
High User Pool	Shift toward hedgers	Lower yields	Higher compensation
Balanced Pools	Neutral	Standard yields	Standard rates
High Hedger Pool	Shift toward users	Higher yields	Lower compensation

⏱️ Response Mechanism:

• Automatic Adjustments: Based on 24-hour TWAP calculations

• Gradual Changes: Adjustment speed limits sudden shifts

• Governance Control: Parameters adjustable via QTI governance

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Vault Architecture

🏗️ Current Implementation

aQEURO Vault (Live)

Parameter	Value	Description
Backend	Aave v3 USDC	Primary yield source
Risk Profile	🟢 Low	Established DeFi protocol
Target APY	4-12%	Market-dependent
Max Exposure	50M USDC	Risk limit

🚧 Future Vault Variants (Roadmap):

• mQEURO: MakerDAO PSM/DSR integration

• bQEURO: Tokenized T-Bills & RWAs

• eQEURO: Ethena & advanced strategies

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Compliance & Security Features

🔐 Access Control Roles

Role	Permission	Typical Holder
DEFAULT_ADMIN_ROLE	Grant/revoke roles, critical admin	Multisig
MINTER_ROLE	Mint new QEURO	QuantillonVault
BURNER_ROLE	Burn QEURO	QuantillonVault
PAUSER_ROLE	Pause/unpause	Emergency multisig
COMPLIANCE_ROLE	Manage blacklist/whitelist	Compliance team

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🚦 Rate Limiting System

The rate limiting system protects the protocol against large-scale manipulation attacks by limiting mint/burn volume per address over a given period.

Technical Implementation

// Rate Limiting Constants
MAX_RATE_LIMIT = type(uint96).max    // Maximum configurable limit
RATE_LIMIT_RESET_PERIOD = 1 hours    // Reset window

Mechanism

1. Per-address tracking: Each address has its own mint/burn limit

2. Sliding window: The limit resets after 1 hour of inactivity

3. Accumulation: Operations accumulate within the current window

4. Blocking: If cumulative total exceeds the limit, operation fails

Configuration

Parameter	Default Value	Governable
rateLimitCaps[address]	MAX_RATE_LIMIT	✅ Yes
RATE_LIMIT_RESET_PERIOD	1 hour	❌ Constant

Use Cases

• Anti-whale protection: Prevents an actor from minting/burning massively

• Operation smoothing: Distributes load over time

• Anomaly detection: Bypass attempts can be monitored

Associated Functions

// Check and update mint rate limit
function _checkAndUpdateMintRateLimit(address account, uint256 amount) internal;

// Check and update burn rate limit
function _checkAndUpdateBurnRateLimit(address account, uint256 amount) internal;

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🔴 Minting Killswitch

The Minting Killswitch is an emergency mechanism that instantly halts all minting operations on the protocol.

Implementation

// Killswitch state
bool public mintingKillswitch;

// Enable/disable (admin only)
function setMintingKillswitch(bool enabled) external onlyRole(DEFAULT_ADMIN_ROLE);

When to Use?

Situation	Action	Consequence
Vulnerability detected	Enable killswitch	No more QEURO can be minted
Oracle compromised	Enable killswitch	Prevents minting at wrong prices
Attack in progress	Enable killswitch	Stops exploitation immediately
Situation resolved	Disable killswitch	Resumes normal operations

Impact

• ✅ Burns remain possible: Users can still exit

• ✅ Transfers remain possible: QEURO remains transferable

• ✅ Redemptions remain possible: Via the Vault (which burns)

• ❌ Minting blocked: No new QEURO issuance

Difference with Pause

Function	Mint	Burn	Transfer	Redeem
Killswitch ON	❌	✅	✅	✅
Pause ON	❌	❌	❌	❌

Note: The killswitch is a less drastic measure than full pause, allowing users to exit the protocol.

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📋 Compliance System (Blacklist/Whitelist)

The QEURO protocol integrates a compliance system to meet regulatory requirements, including MiCA.

System Architecture

┌─────────────────────────────────────────────────────┐
│                  COMPLIANCE SYSTEM                   │
├─────────────────────────────────────────────────────┤
│  Normal Mode (whitelistEnabled = false)             │
│  ├── Everyone can transfer                          │
│  └── Except blacklisted addresses                   │
├─────────────────────────────────────────────────────┤
│  Whitelist Mode (whitelistEnabled = true)           │
│  ├── Only whitelisted addresses can transfer        │
│  └── Blacklisted remain excluded                    │
└─────────────────────────────────────────────────────┘

Compliance Mappings

mapping(address => bool) public isBlacklisted;   // Blocked addresses
mapping(address => bool) public isWhitelisted;   // Authorized addresses
bool public whitelistEnabled;                     // Whitelist mode active

Management Functions

Function	Required Role	Description
blacklistAddress(address)	COMPLIANCE_ROLE	Block an address
unblacklistAddress(address)	COMPLIANCE_ROLE	Unblock an address
whitelistAddress(address)	COMPLIANCE_ROLE	Authorize an address
unwhitelistAddress(address)	COMPLIANCE_ROLE	Remove authorization
toggleWhitelistMode()	COMPLIANCE_ROLE	Enable/disable whitelist mode

Batch Operations

For gas efficiency, batch operations are available:

function batchBlacklistAddresses(address[] calldata accounts) external;
function batchUnblacklistAddresses(address[] calldata accounts) external;
function batchWhitelistAddresses(address[] calldata accounts) external;
function batchUnwhitelistAddresses(address[] calldata accounts) external;

Verification Logic

On each transfer, the _update function verifies:

1. Sender is not blacklisted
2. Recipient is not blacklisted
3. If whitelistEnabled:
   - Sender must be whitelisted (except for minting)
   - Recipient must be whitelisted (except for burning)

Regulatory Use Cases

Scenario	Configuration	Result
Open public	whitelistEnabled=false	Everyone can transfer except blacklisted
OFAC sanctions	Blacklist sanctioned addresses	Sanctions compliance
KYC required	whitelistEnabled=true	Only KYC'd users can use
Fund freeze	Blacklist specific address	Funds frozen for investigation

Emitted Events

event BlacklistUpdated(address indexed account, bool status);
event WhitelistUpdated(address indexed account, bool status);
event WhitelistModeToggled(bool enabled);

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⚠️ Emergency Controls

Emergency Controls Overview

Control	Severity	Required Role	Reversible
Rate Limit	🟡 Medium	Automatic	✅ Auto-reset
Killswitch	🟠 High	ADMIN	✅ Yes
Pause	🔴 Critical	PAUSER	✅ Yes
Blacklist	🟡 Targeted	COMPLIANCE	✅ Yes

Escalation Procedure

Level 1: Rate Limiting (automatic)
    ↓ If insufficient
Level 2: Minting Killswitch (admin)
    ↓ If insufficient  
Level 3: Targeted Blacklist (compliance)
    ↓ If insufficient
Level 4: Full Pause (pauser/admin)

Token Recovery

In case of tokens or ETH sent by mistake to the contract:

// Recover ERC20 tokens
function recoverToken(address token, uint256 amount) external onlyRole(DEFAULT_ADMIN_ROLE);

// Recover ETH
function recoverETH() external onlyRole(DEFAULT_ADMIN_ROLE);

Recovered funds are sent to the configured treasury address.

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Economic Sustainability Model

📈 Revenue Streams

Primary Revenue Sources

1. Mint/Redeem Fees: 0.1% on all QEURO operations

2. Yield Management: 10% of Aave collateral deployment returns

3. Position Fees: Entry/exit fees from hedger operations

Note: Cross-chain bridge fees and additional vault fees are planned for future implementations.

🎯 Key Performance Indicators

Health Metrics

• Peg Stability: Target <2% deviation from EUR

• Collateral Ratio: Maintain >101% across all conditions

• Yield Consistency: Dynamic based on Aave market conditions

• Governance Activity: QTI holder participation

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Risk Management Framework

🛡️ Comprehensive Risk Matrix

Technical Risks

Risk Factor	Probability	Impact	Mitigation Strategy
Smart Contract Bug	Medium	Critical	Multiple audits, formal verification
Oracle Manipulation	Low	High	Chainlink + circuit breakers, 5% deviation limit
Aave Protocol Risk	Low	Medium	Emergency withdrawal, exposure limits
Liquidation Cascade	Low	High	Circuit breakers, emergency pause

Market Risks

Risk Factor	Probability	Impact	Mitigation Strategy
EUR/USD Volatility	High	Medium	Delta-neutral hedging, yield shift
USDC Depeg	Low	High	2% tolerance monitoring, circuit breaker
Interest Rate Changes	Medium	Low	Dynamic yield adjustment
Regulatory Changes	Medium	High	MiCA compliance, blacklist capability

Emergency Procedures

Crisis Response Protocol

• Level 1: Automatic circuit breakers (oracle pause)

• Level 2: Emergency role intervention (pause operations)

• Level 3: Admin intervention (parameter changes)

• Level 4: Protocol pause (complete system halt)

Recovery Mechanisms

• Token Recovery: Admin can recover accidentally sent tokens

• ETH Recovery: Admin can recover accidentally sent ETH

• Governance Override: Emergency parameter adjustments via governance

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Technical Reference

Contract Addresses

Contract addresses will be published after mainnet deployment.

Key Constants

DEFAULT_MAX_SUPPLY = 1_000_000_000e18  // 1 billion QEURO
MINT_FEE_RATE = 10                      // 0.10% (10 basis points)
MAX_RATE_LIMIT = type(uint96).max       // Per-address rate limit
RATE_LIMIT_RESET_PERIOD = 1 hours       // Rate limit window

Events

• Transfer(from, to, amount) - Standard ERC20 transfer

• Mint(to, amount) - QEURO minted

• Burn(from, amount) - QEURO burned

• BlacklistUpdated(account, status) - Compliance update

• MintingKillswitchSet(enabled) - Emergency control activated

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Conclusion: The Future of Euro DeFi

QEURO represents more than just another stablecoin—it constitutes a comprehensive financial infrastructure designed specifically for the European DeFi ecosystem. Through innovative dual-pool mechanics, dynamic yield redistribution via YieldShift, and robust security controls, QEURO creates a sustainable foundation for euro-denominated decentralized finance.

The MVP implementation focuses on core functionality with USDC collateral and Aave v3 yield generation. Future phases will expand to multi-collateral support, additional vault strategies, and cross-chain deployment.

Our approach prioritizes user experience, regulatory compliance, and sustainable yield generation while maintaining the flexibility to adapt to an evolving financial landscape. The result is a stablecoin that bridges traditional European finance with the innovation and accessibility of decentralized protocols.

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Risk Disclaimer: QEURO is a decentralized financial product that carries inherent risks including smart contract vulnerabilities, market volatility, and regulatory changes. This document is for informational purposes only and should not be considered investment advice. Users should conduct their own research and risk assessment before participating in the protocol.