AMA Recap Crypto Library with Duet Protocol
On 11th May 2021, Duet Protocol conducted an AMA in the Crypto Library Community. Our guest is Bach and Molly. Lots of questions as usual from the Community about Duet Protocol progress. The Duet Protocol team took part in a very interesting AMA session which included introductions, questions from twitter, and a live AMA session with the Crypto Library community. If you missed the AMA in person, read this recap for a deeper insight into Duet Protocol.
Let’s take a look at the most interesting points of our conversation.
Crypto Library Team : So, before we start the AMA could you please introduce yourself to our community?
Bach (Duet Protocol) : Yeah just call me J.Bach a classic music fan. I am one of the core contributors to the Duet Protocol and the main designer of the economic model of Duet. I have worked in the research area for the world's largest digital currency exchange, the world's top 10 public chain, and earlier in financial media, private equity, and the Big Four accounting firms.
Molly (Duet Protocol) : Hi, this is Molly, a member of Duet Team, as well as a fans of Duet acturally!
FIRST SEGMENT (HOST)
Crypto Library Team : What is Duet Protocol? And how does it work?
Bach (Duet Protocol) : Duet is a synthetic assets protocol in brand new paradigm, it has a hybrid mechanism of over-collateralization and algorith-pegging model. Duet allows users to create any quoted assets from the real world on the chain, such as stocks, commodities, futures, and bonds. Instead of selling your crypto assets into fiat currency, Duet enable users to allocate capital to ANY assets with only one crypto wallet. For the minters, there are two ways to generate an on-chain synthetic asset (Duet Asset aka dAsset):
- 1. Deposite ETH/USDT/WBTC/uni LPs etc. to the minting contract, About $300 worth of crypto assets deposited can generate $100 worth of synthetic stock.
- 2. Buy $100 worth DUET token, sent it to minting contract, the DUET will be burnt then you get $100 of synthetic stock.
Crypto Library Team : What's the reason why we have to choose Duet Protocol than other project out there?
Bach (Duet Protocol) : We have three PhDs in our team, as well as two people who have been working professionally with DeFi research for a long time, so innovation is very important to us. Compared with current methods, Duet delivers a unique design to optimize minting and trading.
- 1. Convenient & Fast Asset Minting/Trading: Buy DUET, burn DUET, than you can get a on-chain equity token. You don't have to put in excess collateral and worry all the time about whether it's going to be liquidated.Meanwhile, Comparing to Binance or FTX CM equity tokens, on-chain synthetic assets minting has no entry barriers, trading limitation or single spot risk.
- 2. Multiple Collateral Positions: Syntheix and Linear adopt single asset deposit with sharing debt pool. It means that the amount of money that the minter owes to the system is largely dependent on the rise and fall of the assets mint by others, which means that the minter takes an unpredictable risk. Duet chooses multiple collateral with separated CDPs, which reduces minters’ risk and raise scalability.
- 3. Diversity: Compared with MakerDAO’s DAI and Luna’s UST, Duet provides various types of synthetic assets and embraces wider ecosystems, including Ethereum, BSC and other EVM compatible block chains.
- 4. Compatibility: Duet can provide transferable dAssets which could be leveraged in other DeFi protocols, compared with Perpetual-ish protocol only supporting long or short positions.
Crypto Library Team : Could you provide some information about your Roadmap, How Duet Protocol is progressing so far? And what Duet Protocol is currently focused on?
Bach (Duet Protocol) : The core contract and the oracle have almost done and we are now mainly in the front-end development. It is expected that the testnet will be put online this month. We expect to do IDO at the end of this month and officially launch minting components in June.
Crypto Library Team : Please tell us about $DUET token! What are the token use-case, distribution, and where we can buy it?
Bach (Duet Protocol) : DUET token has strong real utility compare to most tokens. In simple terms, DUET tokens capture transaction fees, lending fees, tax and interest in the system. DUET can be locked into the system as collateral, also can be used as fuel to burn a synthetic asset, and staking for governance reward. Because of the burning mechanism, as long as the synthetic assets side is growing, there will be a long-term deflationary pressure in DUET, meaning that the circulation is constantly decreasing. users can buy it through IDO platforms soon, and Uniswap pool would be opened in June too.
Crypto Library Team : Could you give us an insight about the strategy and the future of Duet Protocol?
Bach (Duet Protocol) : We will deploy DUET to at least three EVM-compatible chains this year, and develop related products around the core functions of DUET as soon as possible, such as lending protocol, asset management protocol, community-based trading platform protocol, and cross-chain stock aggregation protocol, to form the DUET ecological matrix and enhance the liquidity and composability of synthetic assets.
SECOND SEGMENT (TWITTER)
Crypto Library Team : I read that it is possible that in the future you will develop your own internal AMM, how present is this within your future plans and how vital is the development of a platform for you that ultimately only depends on your own and unique technology?
Bach (Duet Protocol) : We started building liquidity pool on the third party swap protocol in order to leverage their large number of users and funds, but for the Duet system to capture the profits generated from trading and lending, we needed to build the DEFI infrastructure ourselves and incentivize liquidity migration after. Besides swap and lending a series of products already in the pipline, including cross-chain synthetic assets gregation protocol, leveraged arbitrage protocol, insurance pool, clearing fund protocol, automatic compounding tool, we call it DuFi Ecosystem,of course, some of the applications need to be built by a global community, not all relying on existing team. We believe in the power of decentralization, and as the core minting infrastructure matures, talens from globe will build more interesting applications on it in the future. It is particularly noteworthy that, compared to our competitors, Duet's goal is not a simple financial application, but a real parallel universe that enables real world asset casting, recomposition, and restructuring.
Crypto Library Team : What role do synthetic assets play within the project structure? From what I could read, the dAssets in conjunction with the stablecoins are the main components of the protocol architecture, so how do they work within the ecosystem?
Bach (Duet Protocol) : For most people, dAsset is a capital diversification option. For others, dAsset can also be a mining shovel, with an incentive when hold it to provide liquidity to the trading pool. Of course, Duet has a lot of utility value for users who are deeply involved in the system
Crypto Library Team : Reading about your project, it is wonderful to note how Duet uses its versatility to promote a bullish and secure financial scheme, you use a hybrid mechanism (overcollateralization + burning algorithms), my question is how your scheme will enhance the liquidity of the project?
Bach (Duet Protocol) : Indeed that's a great question, casting or burning synthetic assets by Duet's Lite-minter contracts theoretically gives users unlimited liquidity. Of course, synthetic assets can also be traded in the ordinary AMM swap like Uni or Pancake. We will provide DUET incentives for the relevant LPs. The design of the system does not encourage people to trade through minting contracts, it should be used to peg the synthetic asset price with arbitrage action, so the commission is needed when you use minting contracts. The system incentivized people to trade through swap protocols and provided them with liquidity.
Crypto Library Team : How do you maintain DUET ecosystem and be able to compete in this evolutionary process? As we know there have been many changes in Crypto such as DeFi, NTFs, and Farming, are DUET able to bring continuous innovation?
Bach (Duet Protocol) : The pace of innovation in DeFi is very fast, so the projects that do not make efforts to improve will be eliminated much faster than the traditional enterprises. We already anticipated this, so we specially sponsored a research institute named Muse Museum. With an annual budget of more than $500,000, the institute is dedicated to in-depth research on blockchain industry. You can expect to see its first report within this month.
Crypto Library Team : Can you tell the community. What differentiates the Duet Protokol model from the Terra & Mirror and ETH & Synthetix models in terms of Key Value Proposition?
Bach (Duet Protocol) : As I just mentioned compared to our competitors, Duet's goal is not a simple financial application, but a real parallel universe that enables real world asset casting, recomposition, and restructuring, this is the biggest difference I guess. For the current under developing core minting module it have the over-collaterazation model similar to Mirror and Synthetix, but we accept a wide range of blockchain world assets as collateral compared to our rivals, who mostly only accept their own issued tokens as collateral, that's not very friendly, the minter takes an additional risk by buying the system token as collateral, not to mention that if it's Synthetix's model and everyone shares the debt pool, the minter is completely unsure of how much he will owe the system. We also integrate the Farming module, which automatically raises interest on users' collateral, reducing migration costs for users. In addition, we have an unique algorithm-pegging model that allows the user to burn Duet tokens without having to put up collateral to create synthetic assets.Minters in this mode will not take any risk of forced liquidation, and have 100% capital utilization.
THIRD SEGMENT (LIVE QUESTIONS)
Crypto Library Team : Right now, Issuing Token is a simple process. However, Building the System and Ecosystem is the most difficult part. How demand of the token will increase and how will this token use in your ecosystem?
Bach (Duet Protocol) : Yeah, what is our unique mechanism, I want to emphasize that Duet's value capture is very strong, equal to Sushi + YFi + Compund + Luna + Mir. DUETs are inherently deflationary token, and as long as the number of synthetic assets grows, that means there are DUET being burnt. Unlike other protocols, their governance tokens are essentially useless except for voting.
Crypto Library Team : Do you have plan B, if there is a recession now, if crypto-winter suddenly comes and everyone starts to sell tokens and exit the projects.
Bach (Duet Protocol) : DUET synthesize assets in the traditional world, and the correlation with crypto is very low. Therefore, DUET has a stronger ability to resist the downward cycle of crypto market than ordinary defi projects, and can even be counter-cyclical. For example, when the world economy is in recession, gold and bonds will rise, so DUET can certainly mint these assets.
Crypto Library Team : Lots of lending Borrowing and other DeFi services are repeated frequently in the DeFi project, so what real innovation has DUET PROTOCOL brought to DeFi ??? What can you do that no one else can?
Bach (Duet Protocol) : We are the world first algo-pegged synthetic stock protocol:smile: Although overcollateralization is also supported, users can choose not to use collateral so that they don't have to worry about being forced liquidation.
Crypto Library Team : Are you sure that your own project will progress and continue to develop in the future.. If so, what are your beliefs about your project and give a little picture for the future?
Bach (Duet Protocol) : This is a very sharp question. If you look at our roadmap, these are all very realistic goals. In the blockchain world, technology is evolving so fast that we don't think it makes sense to plan for too long like a normal company, where things may change every month.
Crypto Library Team : When you build a project with a team, do you take community input and requests into account? What is the role of the community in your project?
Molly (Duet Protocol) : Duet will be governed by DAO, the DUET token holders will be able to vote using Duet Protocol’s on-chain governance system, this proves to be a safe way to collaborate with strangers online. The vote will cover every aspect of Duet’s ecosystem — such as approval of the listing of assets, acceptable collateral varieties, liquidation parameter adjustment, etc. In order to realize the smooth start of the DAO system, Duet will first get funding from qualified investors, develop core components, issue governance tokens, and carry out global promotion activities.