DUO Network is a decentralized derivatives market solution. With the team's rich experience in derivatives and the in-depth application of blockchain technology, DUO (DUO Network Token) will create a transparent and autonomous derivatives market through digital asset mortgages, smart contract liquidation and distributed quotations. The core members of the project have worked in international front-line investment banks such as Citigroup, Credit Suisse, and HSBC, and have carried out in-depth academic cooperation with professors from the National University of Singapore, Boston University, and the Federal Institute of Technology Zurich (ETHZ). DUO tokens serve as a medium of exchange between network participants, smart contracts, and the DUO community, and are used to support nodes, platform management, payment fees, and community rewards.

Project Highlights

1. Conversion Arbitrage

Since graded tokens can be traded in the open market, there may be a deviation between market value and net value, which also creates arbitrage opportunities. When the combined price of the two graded tokens is higher than the market value of the corresponding ETH, traders can split the low-priced ETH into graded tokens and sell them at high prices in the open market to realize arbitrage. On the contrary, if the sum of the prices of the two graded tokens is lower than the market value of the corresponding ETH, traders can buy graded tokens at low prices to merge and sell high-priced ETH to achieve arbitrage.

In order to participate in arbitrage, traders need to pay attention to market prices in real time and execute corresponding arbitrage operations.

2. Token Incentive (Mining)

Changes in supply and demand in the market will cause fluctuations in the price of graded tokens. The DUO system encourages market participants to conduct reasonable arbitrage, because arbitrage behavior is conducive to the stability of tiered token prices. As an incentive, the DUO system will regularly issue DUO tokens to arbitrageurs. The token incentive amount will be related to the number of splits and mergers of members and the number of DUO tokens held.

3. Conversion fee

When splitting and merging tokens, Beethoven charges a small fee as a conversion fee. Users can choose to pay this part in ETH or DUO. In order to encourage users to use DUO, paying the conversion fee with DUO in the early stage can enjoy a certain degree of discount. DUOs recovered as conversion fees will be destroyed until only 50% of the issued tokens remain in the system.

The ETH collected from the conversion will be mainly used for the operating expenses of the system, including price acquisition, fuel fees, etc. The remaining ETH will be used as a reserve for maintaining system price stability, liquidity and market promotion.

Beethoven's income belongs to the DUO community, and we will set up a corresponding non-profit legal entity to manage these incomes.

Project Solutions

Learning from traditional financial markets

The high volatility and low liquidity of digital currency has become its biggest weakness, leading to a sharp drop in the price of digital currency recently.

While solutions are not necessarily standardized, sophisticated marketing tools are essential for any marketplace. These market tools can help manage volatility, increase liquidity and hedge against downside risks. Derivatives products from the traditional financial industry are a high-quality solution to these problems.

Risk management has always been fundamental to derivatives. The core of derivatives is as a risk hedging tool, providing market participants with a channel to disperse and transfer risks. Therefore, derivatives can play an important role in maintaining a benign digital currency ecosystem and managing price risks.

Integrating blockchain technology into the financial industry

What did we learn from the latest cryptocurrency market crash? How do we move forward from here? What we do know is that the current crypto derivatives market is far from perfect.

Derivatives traded over-the-counter lack appropriate industry standards, while centralized exchanges have risks and problems such as security, transparency, and position transferability.

As a project dedicated to solving these problems, DUO Network came into being. It is a decentralized platform that enables the issuance, trading and settlement of tokenized digital derivatives. DUO Network is a Singapore blockchain project initiated by FinBook Pte Ltd and launched in 2017.

With rich experience and in-depth technical understanding of derivatives, DUO seeks to introduce blockchain technology through smart contract mortgages and distributed quotations, and create a transparent and autonomous derivatives market.

They call this framework Collateralized Autonomous Token (CAT). The role of CAT is to develop a set of standards for the issuance, redemption and settlement of digital derivatives. DUO hopes to solve practical problems by introducing corresponding blockchain technology into the existing financial framework by taking the protection of the interests of traders as the primary goal.

"The trillion-dollar financial derivatives market is currently constrained by low transparency and low settlement efficiency," said Lewei Li, CEO of DUO Network, "This requires innovative solutions to unlock more potential. DUO Network hopes to Democratize the derivatives market and empower individual investors through blockchain technology."

The emergence of blockchain technology is admired because it greatly promotes financial decentralization and democratization. Don & Alex Tapscott, authors of Blockchain Revolution (2016), stated: "Blockchain is a digital ledger of economic transactions that cannot be easily manipulated, and can be programmed to record financial transactions and anything of value."

Aiming at the problems caused by existing derivatives, DUO chooses to build derivatives based on blockchain technology—essentially an automated ledger network, and finally solves the low cost of derivatives through encrypted derivative contracts on the blockchain. effectiveness problem.

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