DUCA Market Maker

Deep liquidity for the open market

What is the DUCA Market Maker?

The DUCA Market Maker ("DMM") is an Automated Market Maker that contains our liquidity pools and is fully integrated into our Protocol. The DMM makes available all the native tokens from the protocol to the open market and is the only way the open market can access and interact with the Protocol.

ALL USER ENGAGEMENT WITH THE PROTOCOL IS THROUGH THE TOKENS

Users can't interact with the core Protocol directly. All engagement and influence are through the tokens by entry, exit or holding one or more of the tokens. All interactions have a direct influence on the various token supplies to which the Protocol responds autonomously.

Why do we need this?

  1. To provide the open market with access to all the native tokens of the Protocol via USDC and through deep liquidity.

  2. The DMM gives the Protocol control and ownership over the liquidity to maintain autonomy and integrity because there is no liability to 3rd party providers of liquidity or infrastructure.

  3. The workings of the DMM and the protocol-owned liquidity provide the Protocol with a sustainable business model.

  4. The DMM collects price feeds and market data that informs the Protocol.

How does it work?

The Protocol does not provide its open interface to access the liquidity pools in the DMM. When you go to one of the major DEX Aggregators you can use any of the tokens you hold to swap with one of our native tokens. Enter or exit the ecosystem or move within the ecosystem, that is basically all you can do. Everything else happens fully automated as a consequence and in response to changes in supply. Your token(s) will be 'affected' accordingly, following their individual design.

All liquidity in the DUCA Market Maker is owned by the protocol. DUCATA will make use of the funds that are received via the DCM distribution to increase the various pool sizes. Users are not able to provide liquidity in the DUCA Market Maker. Increasing liquidity will be done manually.

DEEP LIQUIDITY

The minimum TVL of the DUCA Market Maker is 20% of the DUCA Market Cap with an initial maximum total value of 2B DUCA. Hence, this maximum will be reached at a DUCA Market Cap of 10B DUCA. The liquidity in the DMM will start with a much higher percentage, 100% or more and gradually lower towards 20% depending on market dynamics.

Additionally, based on the circulating supply of DUCA (excluding DUCA in the Stability Pool and DMM, including DUCA in the DUS Reserve) we will provide a supply of 50% - 100% in USDC as liquidity within the DUCA / USDC and DUS / USDC pools in the DMM. This will be gradually lowered after the DUCA market cap has crossed 1B.

The funds required to provide this liquidity will come from the DCM distributions and will be owned by the Protocol and stored in the DMM Fund.

The USDC present in the DMM is liquidity that creates excess over-collateralisation. It represents a form of out-of-pocket cash that does not have to rely on the Protocol to stabilise DUCA. Since the minimum amount of collateralisation in the Protocol is +200%, the addition of 100% in USDC in the DMM makes a total of +300% of collateral backing for DUCA and +320% for DUS.

BUSINESS MODEL

The DUCA Market Maker provides the protocol with a sustainable business model. All the transaction fees, arbitrage profit and yield will be added to the Operating Fund in the Treasury. The Operating Fund has an overflow mechanism which sends excess funds to the Community Fund for the benefit of the Community.

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