We are excited to announce today the closure of US$3 million first-round funding of the world’s first multi-chain synthetic asset protocol with a hybrid mechanism of over-collateralization and algorithm stabilization.
The first-round investors include OmniLAB, DraperDragon, BIT Digital Inc（NASDAQ：BTBT)，Everest Ventures Group, One Block Capital, Moonwhale Ventures, Dutch Crypto Investors, LD Capital, Zonff Partners, Cabin VC, ArkStream Capital, individual investors include the partners of A&T Capital.
OmniLAB is the investment fund that backed the world’s first stablecoin (on OmniLayer) circulation specification for Lightning Network.
DraperDragon Innovation Fund is a core member of Draper Venture Network and mainly focuses on investing in US-China cross-border startups.
Synthetic assets paradigm path selection
The Crypto market is a high-speed self-evolving dynamic ecosystem in which DeFi is pioneering massive adoption and mechanism innovation. Duet is bridging the gap between real-world assets and crypto markets and we are convinced that synthetic asset is the optimal approach to connect these two worlds.
Duet synthetic asset is targeting the stock market. Compared with current methods, Duet delivers a unique design to optimize minting and trading.
- Openness and user-friendly： Comparing to Binance or FTX CM equity methods, on-chain synthetic assets minting is easier and friendly for investors, having no entry barriers, procedures cost, or single spot risk.
- Multiple collateral positions: Synthetix and Linear adopts the single asset deposit with sharing debt method. Compared to them, Duet chooses multiple collaterals with separated CDPs, which reduces minters’ risk and raises scalability.
- Assets diversity and compatibility: Compared with MakerDAO’s DAI and Mirror’s UST, Duet accepts various types of synthetic assets and embraces wider ecosystems, and supports Ethereum, BSC, and other EVM compatible blockchains.
- Compatibility: Duet provides transferable dAssets which could be leveraged in other DeFi protocols, compared with perpetual-ish protocol which only supports long or short positions.
Improvement and innovation go hand in hand
Currently, the development of synthetic assets still faces challenges such as promoting minting incentives, increasing asset liquidity and optimizing capital efficiency. Duet bonds the improved existing mechanism and innovative paradigm. Duet initiates the dual synthetic mint methodology: over-collateralization + algorithmic pegging, which simultaneously supports users over-collateralize their deposit to mint assets and instant minting channel.
First, Duet reforms the over-collateral mechanism. Balancing capital efficiency and CDP safety is the priority to consider. DUET acts as the coordinator of collateral ratio in this method. For users dual-stake collateral and DUET, they get a CDP defender and an adjustable liquidation limit.
Second, Duet supports algorithm pegging asset minter: DUET token burn and direct mint synthetic dAssets empower a seamless and 0-spread asset minting and trading process while providing stablecoin dUSD and leverage trading via minting XL/XS dAssets.
Besides minter modules, Duet also brings other improvements:
- Wide Range of Assets Acceptance: Support mainstream native assets, interests-bearing assets, cross-chain assets, and Security Tokens act as collateral, enabling Duet to absorb major crypto market domain
- Optimized Capital Efficiency: Collateral ratio adjustment, leverage trading, principal assets yield enhancement, etc., are designed to raise users’ capital efficiency and create more use cases for DUET token
Ultimate empowerment by Duet
DUET plays an essential role in every Duet module, combining 4 major functions, including minting, adjustment, earning, and governance:
- Algorithm-pegged dAsset value vehicle: DUET is burned to mint equivalent dAsset, which acts as an asset channel and value vehicle.
- Capital Utilization Conditioner：In over-collateralization, DUET deposits adjust CDP liquidation limit leading to better capital efficiency and safer collateral position.
- Interest-Earning Capture： System fee, collateral yield earning buy-back, and other various use cases backs DUET value. Similar to the yearn, 20% collateral farming reward will be distributed to DUET holders.
- Governance: The Duet protocol will be an open, community-led DAO protocol. Proposals can be put forward for system parameter design, acceptance, and removal of collateral assets, online and delisted dAsset and DUET incentive revisions, which are determined by voting.
Establish a financial world governed by DAO
In the coming days, Duet is going to announce the second round of investors and regional partners from around the globe. The vision of Duet Protocol is to build an on-chain parallel space, with global partners and contributors, governed by DAO that enables the on-off ramp of Flat Assets (Traditional Assets) and Sharp Assets (Crypto Assets).
Duet’s innovative dual synthesis model can greatly improve the capital efficiency of user’s funds. With Duet, the global investors would be able to create and allocate capital to any assets with only one digital wallet in a frictionless and user-friendly manner.
Duet will be first launched on Ethereum chain, and will be deployed to various ecosystems in the future to provide richer assets and transaction services for the crypto market.
For latest update and exciting new, stay tuned @Duet~