As you may know, Duet Protocol has recently launched Duet Pro, a platform that allows users to trade RWA (Real World Assets) with at most 100x leverage on Arbitrum One. Many of you probably have already tried it in our Duet Pro Trading Carnival and earned significant profit. Congratulations!
While trading can be a profitable venture, it can also be complex and risky for some users. If you’re looking for a simpler way to earn profits on Duet Pro, then Duet Pro Mining is the perfect solution for you. By providing liquidity on Duet Pro, you can earn a share of the platform’s transaction fees and also obtain PnL distribution.
With a reward of 80%, Duet Pro Mining offers the highest liquidity provider reward in the industry. Besides, the diversification of the listed assets on Duet Pro reduces liquidity providers’ exposure to risks associated with crypto trading only, making it the ideal risk-hedging tool for your portfolio.
Here are the details on the mechanism and tutorial of Duet Pro Mining. Read on and start earning passive income today!
Duet Pro Mining Mechanism
Liquidity Providers cover the discrepancy of trading positions between long and short positions for each of the trading symbols of the specific trading pool they added liquidity to. So if the long positions of a trading symbol exceed the short positions, then the liquidity providers in this event take over the short side. In the opposite case, if the short positions of a trading symbol exceed the long positions, liquidity providers would take the long side, to cover the discrepancy of missing positions between the both. Covering the discrepancy opens up a potential market risk for liquidity providers, but also the potential to earn a share of the traders’ losses.
So in general, it is essential to comprehend that liquidity providers are the counterparts of traders on Duet Protocol. When traders realize profits, they do so at the expense of liquidity providers provided liquidity. When traders realize losses or are liquidated, liquidity providers realize profits at the expense of traders.
What Makes Duet Pro Mining the Best?
Highest Transaction Fee Return
Liquidity providers (LPs) play a crucial role in the functioning of decentralized exchanges, and Duet Pro offers attractive incentives for them. With the highest transaction fee return in the industry (up to 80%), LPs can earn substantial income by providing liquidity to the platform. Accumulating Positive Returns By participating in Duet Pro’s trading activities with retail traders, liquidity providers can accumulate positive returns with maximum probability. This feature makes Duet Pro an appealing option for those looking to invest in the platform as LPs.
Diversification and Risk Hedging Nature
This diversification of the listed assets is particularly advantageous for Duet Pro’s LPs as it reduces liquidity providers’ exposure to risks associated with crypto trading only. For most DeFi protocols, the assets traded on the platform are crypto only and are very likely to move in the same direction as the market fluctuates, which increases the risks of LP failure. For Duet Pro, the traded assets are highly diversified, balancing the risks and returns of the portfolio, guaranteeing the overall stability of the LPs.
Stake USDC to Obtain PnL Distribution
At https://pro.duet.finance/#/lite/liquidity, Users can stake USDC to provide liquidity to the liquidity pool and obtain PnL distribution. Based on the share of liquidity providers in the liquidity pool, they will receive a proportionate share of profit or loss rewards. When the liquidity pool makes a profit, the revenue will be split between the base revenue and the accelerated revenue. Liquidity providers will receive base revenue (100%) and the accelerated revenue (up to 100%) obtained through staking $DUET and $bDUET. When the liquidity pool loses money, users must bear the corresponding share of losses.
Assume user A provides 1000 USDC in liquidity and stakes $DUET and $bDUET worth 500 USD. The entire liquidity pool has a balance of 100,000 USDC, and the single transaction profit and loss are +5000 USDC.
- First, we calculate the initial PnL (dispatchPnL) distributed to user A. User A’s original balance in the liquidity pool (originalLiquidityBalance) is 1000 USDC. Divide 1000 by the entire liquidity pool balance (totalLiquidityBalance) of 100,000 and multiply by the total profit and loss of the entire liquidity pool (totalLiquidityPnL) of 2500 USDC. The calculation result is: (1000/100000) * 2500 = 25 USDC. This part is considered as 100% revenue for user A.
- Next, calculate the additional accelerated PnL that user A obtains through staking $DUET and $bDUET. User A’s staked USD value for acceleration (boostUSD) is 500 USD, and the maximum staked USD value for acceleration (maxBoostUSD) is equal to the original funds, which is 1000 USDC. Therefore, we use 500 USD. Then divide it by the entire liquidity pool balance (totalLiquidityBalance) of 100,000 and multiply by the total profit and loss of the entire liquidity pool (totalLiquidityPnL) of 2500 USDC. The calculation result is: (500/100000) * 2500 = 12.5 USDC. This part is an additional 50% revenue for user A obtained through acceleration.
- Calculate the final liquidity reward (liquidityPnL) for user A in a single transaction. The initial distributed PnL (dispatchPnL) is 25 USDC (100% revenue), and the additional accelerated PnL obtained through staking $DUET and $bDUET is 12.5 USDC (50% revenue). Adding 25 USDC and 12.5 USDC, user A can obtain a 37.5 USDC liquidity reward in a single transaction.
- Finally, calculate the total accumulated profit and loss (totalPerLiquidityPnL) for user A. Add the current calculated liquidity reward (liquidityPnL) of 37.5 USDC to the user’s previous total accumulated profit and loss.
To be Continued…
Well isn’t this intriguing? This is only part of the rewards liquidity providers can get on the Duet Pro RWA trading platform. We have something more in the pipeline, something about mining acceleration, something about doubling profit, as well as a larger scope of assets onboarding…
Please stay tuned for Introducing Duet Pro Mining (Part 2) !