DUCA: Value

Learn about DUCA's Value

What is DUCA's Value?

DUCA is Programmatic Money. Its value lies in its ability to self-regulate and adjust its supply autonomously, based on real-time market conditions and without the need for external intervention. This enables DUCA to maintain its value dynamically, reflecting the true state of market dynamics at any given moment.

How is DUCA's Value Determined?

DUCA's value is determined by an Algorithmic Float. Unlike traditional currencies, DUCA's value is not fixed to any fiat currency or commodity. It utilizes an Algorithmic Float that adjusts DUCA’s value based on the comprehensive FOREX data of the world’s most traded currencies. This method allows DUCA to reflect a real-time value that is responsive to global financial movements, creating a currency resistant to value depreciation and inflation, while maintaining purchasing power.

How is DUCA's Value Protected?

To ensure that DUCA's value is always protected, DUCA utilizes a triple-layer collateralisation system within the protocol, safeguarding the 100% backing of its circulating supply:

1. Reserve Layer: The foundational layer of full collateralisation, maintained by the Reserve. Here, DCM tokens are added to the Reserve as direct collateral whenever DUCA is created.

2. Stability Pool Layer: This layer achieves 100% over-collateralisation through liquidity provided by market participants, who receive LPD tokens in return. This arrangement is incentivised within the Stability Pool's structure.

3. Liquidity in USDC: As the final layer, USDC liquidity in the DUCA Market Maker's pools adds an extra layer of over-collateralisation, particularly crucial in the protocol's early stages.

These three layers result in a total collateralisation of over 300%, while maintaining 100% capital efficiency. This means that none of this additional collateral comes from an additional cost when minting DUCA. DUCA is always minted 1:1 against its exchange value.

How is DUCA's Value Maintained?

DUCA's value is maintained through the management of liquidity within its ecosystem. The DUCA Market Maker (DMM) acts as the central mechanism in this process, ensuring there is always sufficient liquidity to accommodate market demands.

The AMO works with the DMM to balance liquidity pools and adjust the availability of DUCA and its related tokens in response to real-time market conditions. DUCA’s valuation is continually recalibrated, embracing market volatility rather than trying to suppress it. This reflexivity enhances the stability of the token but also aligns it closely with market dynamics, making it a true form of Programmatic Money.

Continue reading to discover how the DUCA Reflexivity Protocol creates Programmatic Money.