Original | Odaily Planet Daily (@OdailyChina)
Author｜Nan Zhi (@Assassin_Malvo)
On July 5, the liquidity aggregation investment strategy protocol Doubler announced that the mainnet version Doubler Lite was launched on Arbitrum on July 5. At the same time, a 5-day "liquidity airdrop" event will be launched, distributing a total of 500,000 DBR tokens, and addresses holding C tokens can receive the airdrop.
In this article, Odaily will explain how to participate in the airdrop activity, briefly analyze the business logic of Doubler, and analyze the protocol operation process in detail.
Airdrop Event
Basic Information
Airdrop quantity: 500,000 DBR;
Deadline: July 10, 10:30 (UTC+8);
Participation method: Hold C tokens and receive DBR according to the proportion of C tokens held. The maximum airdrop for a single address is 1,000 DBR.
Distribution date: July 25th.
Detailed process
Go to Doubler official website and prepare ETH or WETH (Arbitrum)
Invest ETH in the Investment module to obtain C tokens, E tokens, and 10x tokens (not available in case of floating profit in the pool);
Finally, the DBR airdrop amount is calculated based on the C holdings. For example, if you invest 1 ETH in the above figure, you will get 2866 C, which accounts for 0.107% of the total, and you can get 537 tokens. Readers can also exchange other tokens for C tokens to get more airdrops.
As to whether to exchange other 10x tokens and E tokens for C tokens, readers can refer to the following ideas:
If you only want to get airdrops, then if ETH is limited, you can replace all of it with C to get the maximum amount of airdrops;
Participate in the airdrop to use the protocol and gain its benefits. If you think it will continue to fall, you can convert C tokens into 10x tokens at the point where you think it will fall, and wait for the floating profit to exit after the airdrop. If you think it will rebound, you can convert it into C tokens immediately after the airdrop. E tokens should be converted into 10x tokens when you think it is the high point of ETH's rise. Simply put, get as much 10x as possible when it falls, and then sell it for profit. The specific principle is described below.
Please note that a 2% handling fee is charged for investing assets, withdrawing assets, and converting assets, which should be included in the cost calculation.
Doubler Quick Facts
Doubler Lite consists of four main modules. Its specific operation process is relatively complicated. Readers can just remember the core concepts and read the next section:
Martin strategy: Continue to invest in low-cost assets to reduce average costs when prices fall, and maximize profits when prices rebound.
Separation of income rights: Separate the income rights and cost rights of an asset and tokenize these rights.
Adaptive inflation management: Ensure the number of 10x tokens remains at 10% of the pool cap through automatic rebase.
Dynamic Redemption: Dynamically adjust the number of tokens redeemed based on changes in the spot price and the average price of the fund pool to ensure that the average price and the interests of other users in the mining pool are not affected.
Martin Strategy
The Martingale Strategy is a common gambling strategy. The basic idea is to make up for previous losses by doubling the investment and finally make a profit.
For example, the initial bet is 10 yuan. The first bet is 10 yuan, and the total loss is 10 yuan; the second bet is doubled to 20 yuan, and the total loss is 30 yuan; the third bet is doubled to 40 yuan and wins, and the final total profit is 10 yuan. In theory, the Martingale strategy will eventually make a profit, but it has the disadvantages of requiring a large amount of funds and poor anti-black swan ability (that is, the amount of reinvested funds increases rapidly after continuous losses, and the probability of a casino losing in a row is not small).
Doubler applies Martingale strategy to crypto investment and solves the funding problem by "raising funds". Whenever the underlying asset falls to a certain extent, more bargain hunting funds are injected to achieve a rapid decline in the average price. In the latest version of Doubler Lite, there is no restriction on the specific bargain hunting point, but the market adjusts the purchase price by itself through an incentive mechanism.
Let’s move on to the next question: How to divide the profits of ETH purchased with crowdfunding? How to calculate the losses? What is the specific form of exit?
Asset Certificate: Separation of Income Rights
In Doubler Lite, for the assets injected into the funding pool, the protocol separates the ownership of costs and revenue into cost tokens and revenue tokens. The token representing the ownership of costs is the C token, and the token representing the revenue is the 10x token. In addition, the E token is added, which can be converted into the 10x token in one direction.
Doubler has designed a complex system for token minting and profit distribution. Leaving aside the specific process and values, a simple understanding is that after the crowdfunding funds have bottomed out the tokens, when the token value exceeds the average price of the fund pool (for example, Ethereum bottomed out from 3000 U to 2000 U, with an average cost of 2500 U, and then rebounded to 3000 U), there is a profit space at this time. Users can choose to use 10x tokens and C tokens to share the profits, with more 10x tokens per unit and less C tokens.
project financing
On January 30, 24, Doubler, a liquidity aggregation investment strategy protocol, announced the completion of its seed round of financing, led by Youbi Capital, with participation from Bixin Ventures, Mask Network, Comma 3 Ventures, Pivot Labs, Continue Capital, Sanyuan Capital, Waterdrip Capital, DWF Ventures, Gate Labs, Formless Capital, MT Capital and CatcherVC. The specific amount of financing has not been disclosed yet.
Token Information
The total amount of DBR tokens is 100, 000, 000, and the specific distribution is as follows:
Liquidity incentives: 40%, used to reward community users who use the product. The plan will be launched as needed after the mainnet is launched;
Ecosystem Fund: 15%, used to incentivize partners and communities that make significant contributions to the ecosystem and promote a more stable and healthy growth curve;
Investors: 15%, of which 10% is issued in TGE, 3 months lock-up, 24 months linear vesting;
Community: 10%, used to incentivize early participants and supporters of the testnet ITO phase, 50% issued at TGE, and the remaining 50% issued in the third quarter;
Core Contributors: 10%, these tokens will be reserved as rewards for current and future team members, 0% will be issued at TGE, 6 months lock-up, 8 quarters linear vesting;
Advisors: 5%, 0% unlocked at TGE, 6 months lockup, 24 months linear vesting;
Marketing and Working Capital: 5%, 10% issued at TGE, vesting linearly over 24 months.
In summary, the initial circulation ratio is (15% * 10% + 10% * 50% + 5% * 10%) = 7%, that is, 7 million tokens are initially circulated. If calculated at a unit price of US$1, a total of US$500,000 worth of tokens will be distributed in the airdrop activity.
Mechanism Details
10x Tokens
10x is Doubler's direct income token. The upper limit of 10x tokens is 10% of TVL (for example, there are 10 ETH in the current pool, with a unit price of US$3,000, and the total number of 10x tokens is 10 × 3,000 × 10% = 3,000, which will change with factors affecting the TVL of the token pool such as changes in ETH price). In actual operation, the difference between the upper limit and the actual issuance amount is called the "unissued portion" and can be converted by E tokens.
When the average price of the token pool is less than the spot price (i.e. it is now in an overall profitable state), users will not receive 10x for their invested assets.
When the average price of the token pool is greater than the spot price (that is, it is now in an overall loss state), tokens will be distributed according to the following formula, where S is the spot price, AVG is the average price of the token pool, and Q is the amount of ETH invested.
Taking the average pool price of 3,000 US dollars as an example, the 10x tokens obtained by investing 1 ETH are shown in the figure below. The lower the spot price, the more 10x tokens can be obtained. This is also what was mentioned earlier: "There is no limit on the specific bottom-fishing point, but the market adjusts the purchase price through an incentive mechanism." The greater the price deviation, the more 10x you get, and the more profit you will make when the price returns to the surface in the future.
C Token
When the pool has a floating profit, the amount of C tokens returned will be calculated based on the average price of the pool × the amount of ETH invested;
When the pool has a floating loss, the amount of C tokens returned will be calculated based on the spot price × the amount of ETH invested;
E Token
When the pool has a floating profit, the amount of E tokens returned will be calculated based on the spot price × invested ETH ÷ the average price of the pool;
When the pool has a floating loss, the number of E tokens returned will be calculated based on the invested ETH.
E tokens can be exchanged for 10x tokens in one direction, and the exchange amount is (the number of E tokens invested ÷ the total number of E tokens) × the number of unissued 10x tokens. Since it is a one-way exchange, the timing of minting 10x tokens has a great impact on the final return.
Profit Mechanism
From the above exchange formula, it can be seen that the more the pool loses, the more 10x tokens the user will get by investing ETH, and the fewer C tokens, and vice versa. Therefore, when the pool is in a state of neither profit nor loss, it is a balance point. At this time, the marginal acquisition ratio of C tokens and 10x tokens is 10: 1, which means that the single value of the two in equilibrium is 1: 10.
The rule set by Doubler is that users need to submit the corresponding two tokens according to the actual 10x and C ratio in the token pool before they can withdraw ETH. As shown in the figure below, the current C:10x in the total pool is 10.322, so the same ratio of two tokens is also required for redemption. The redemption value is (redemption token amount ÷ total amount × TVL) = 1000 ÷ 257272 × 257272 = 10,000 US dollars.
As the floating profit increases, the value of C tokens will continue to decline, while the value of 10x will continue to rise. Some simplified algorithms believe that after exceeding the cost price, the profit will be divided proportionally by 10x, which is intuitively easier to understand.
In fact, Doubler also has an inflation and deflation mechanism, which affects the profit calculation and the timing of exchanging E tokens for 10x tokens. This article will not explain it in depth, but in general, it is "selling high and buying low", including obtaining 10x tokens when the market falls, consuming 10x tokens to withdraw from the pool when the market rises, or selling C tokens when the market falls, and obtaining C tokens when the market rises, etc. The specific profit target and operation point need to be changed according to the actual situation of the reader.
in conclusion
Doubler is more user-friendly for users who are good at calculating and bottom-fishing, which can reduce their leverage risk and enhance their returns. However, the overall design of the protocol is very complex, and most users find it difficult to clearly calculate gains and losses, making it difficult to popularize. However, based on the current amount of capital participation, airdrops still have a high participation value.