DuckDAO is a decentralized incubator supported by the community. The goal is to provide all community users with an opportunity to invest in early crypto projects, so as to provide funds, expertise and marketing support to potential cryptocurrency projects.
Written by: Karen
Early financing of cryptocurrency projects is only for high-net-worth investors or venture capital institutions, which has been criticized by community users. Large investors or venture capital institutions are often able to buy tokens in a project’s strategy round, seed round, and private equity round at a price much lower than that after the project’s tokens go live, and then sell their shares to retail investors. It is easy to achieve profit, but at the same time, it has caused a certain long-term negative impact on the popularity of the project.
In view of this, the decentralized incubator DuckDAO hopes to break this “dead loop” of early investment in high-potential crypto projects by providing all community users with the opportunity to invest in early crypto projects.
As of the time of writing, the number of holding addresses of the DuckDAO community token DDIM currently has 3084, and the token price has increased by more than 700% in the past month. Before understanding DuckDAO’s incubation project and token economics, this article will first introduce the operating mechanism of DuckDAO and its DeFi market maker Duck Liquidity Pool.
What is DuckDAO?
DuckDAO officially launched its website on July 14, 2020. It claims to be a decentralized incubator supported by the community. The goal is to provide everyone with an opportunity to invest in early-stage crypto projects, not just for high-net-worth investors or venture capital institutions , In order to provide funds, expertise and marketing support to potential cryptocurrency projects.
According to the record of DuckDAO’s previous AMA activities, Ken, Lukas and Travis Derek are the three founders of the project, but the official website does not disclose the background of the founders. The known information is that DuckDAO’s partners include YouTube encrypted bloggers Ivan On Tech and Boxming, both of which have more than 200,000 subscribers.
In addition, DuckDAO’s exchange partners include LATOKEN, Bibox, KuCoin, ACDX, Serum, and Hotbit.
DuckDAO’s community is called “Ducks”, which can provide funding and other support for the development of DuckDAO partner projects after meeting certain conditions. “A VC or a thousand ducks, who will win?” is the slogan of DuckDAO, from which we can see that community users play a key role in DuckDAO.
How does DuckDAO work?
DuckDAO promotes the rapid development of the project by establishing long-term partnerships with supported encryption projects. The operation mode has the following three levels:
Level 1 (incubation level) : Cooperate with a project at the initial stage, including marketing, consulting, and other services, until the project is launched on an exchange.
Level 2 (strategic level) : Assist the project in strategic publicity and other activities through social media channels such as Twitter and Telegram.
Level three (general contribution level) : DuckDAO manages the OTC sales of project tokens and community requests, but will not directly participate in the project.
Specifically, DuckDAO first conducts due diligence on potential encryption projects to ensure compliance with their security standards, and then decides whether to incubate based on user interests, experience, and project potential. After the incubation project is successfully launched, DuckDAO will continue to provide marketing and consulting services for it.
Projects cooperating with DuckDAO will allocate a certain amount of tokens to DuckDAO users, and the only way to join the DuckDAO community is to own the community token DuckDaoDime (DDIM).
What are the conditions for joining the DuckDAO community?
DuckDAO will divide the community members into five different levels according to the user’s DDIM holdings. Once the minimum threshold is reached, they can join the corresponding DuckDAO community club. The five levels are:
🐥 Duck Fight Club: 10 DDIM
🐥 Beach Club: 200 DDIM
🐥 Gentleman’s Club (VIP): 2,500 DDIM
🐥 Diamond Club (VVIP): 10,000 DDIM
🐥 Duck Allstars Club: Top ten DDIM holders
The higher the level, the higher the amount of investment that community members can get. However, if the user’s DDIM balance is below the minimum threshold of the level, it will be automatically removed.
It is worth noting that, unlike other DeFi projects, the 10 members of the Duck All-Star Club will have the right to vote on unlocking the DDIM Reserve, and 6 or more people will be approved.
Currently, there are two ways to obtain DDIM, namely, buying DDIM on Uniswap and participating in community activities (such as AMA).
Token Economics of Community Token DDIM
DDIM token distribution model
DuckDAO in 2020, released in October DDIM Beige Book noted, DDIM total supply was 1.5 million, which is assigned to DDIM Reserve 50 spindles, 400,000 pre-sale, Uniswap 28 spindles, dropped 200,000, DuckTreasury 12 Ten thousand pieces.
Of the 120,000 allocated to DuckTreasury, 80,000 will be rewarded to community members who participate in AMA and contribute to the DAO; 40,000 will be allocated to Duck team members, and will no longer be allocated to team member tokens, unless they themselves buy.
In addition, the 500,000 tokens allocated to DDIM Reserve have been locked, and the unlocking proposal can only be removed by the Duck team, and only the top ten DDIM holders will vote for it (6 or more of them are required to approve it. ), which can be used for the liquidity required by the exchange, the liquidity required for member incentives, and the liquidity required to adjust the token price.
What is Duck Liquidity Pool?
Duck Liquidity Pool (DLP) is a DeFi market maker agreement established by DuckDAO. After raising funds from the first sale of pre-mined tokens, market makers can provide services to projects and exchanges. The liquidity mining reward token is DUCK. On December 20th, DuckDAO launched the DUCK smart contract.
A member of DuckDAO previously stated , “The reason for the creation of the new token DUCK is that Duck Liquidity Pool is an additional service of DuckDAO. In addition, for market maker services, funds are required from the beginning, while DDIM tokens are relatively scattered and cannot To mine.”
How does Duck Liquidity Pool work?
Duck Liquidity Pool operation process
Users can become LPs by providing liquidity for multiple DUCK or DDIM fund pools on Uniswap. The received LP tokens can be pledged to DUCK Farm to earn DUCK and market maker rewards. It is worth noting that some fund pools have higher income multipliers.
The core element of the Duck Liquidity Pool is the “unilateral destruction” model. Whenever a liquidity provider withdraws its share, it will destroy the side of the initial liquidity it provided. However, DuckDAO stated that passive income such as higher annual interest rates (ie, DUCK rewards), market maker profits, airdrops of incubation project tokens, and customized NFT rewards have the potential to attract more users to provide and maintain liquidity . On the other hand, the unilateral destruction model defines DUCK tokens as a deflationary token.
DuckDAO users provide liquidity and the process of pledge and pledge settlement
Currently, Duck Liquidity Pool has three fund pools open on Uniswap, namely DUCK/ETH, DUCK/DDIM, and DDIM/ETH. As of the time of writing, DuckDAO’s 24-hour trading volume is US$552,600, and the total locked position is US$6.124 million.
DUCK’s token economics
DUCK token distribution model
According to the Duck Liquidity Pool document , the initial total amount of DUCK is 100 million, of which 70% of the tokens (70 million) will be allocated to liquidity providers through liquidity mining, and 22% will be sold as pre-mined tokens. DuckDAO Liquidity Pool provides initial liquidity, with 8% as operating tokens.
Among them, among the tokens used for pre-sale (22 million), DuckDAO reserves 10 million DUCK tokens for its members at a fixed price of 0.04 USD, and the remaining 12 million will be sold to strategic cooperation outside the DuckDAO ecosystem For partners and external investors, the price ranges from US$0.044 to US$0.07.
Of the 8% operating tokens, 4% are allocated to DUCK Treasury, 3% are used as reserves (Reserve, which will be locked), and 1% is reserved for the core team. Among them, the tokens in DUCK Treasury will be linearly unlocked within 12 months for business development, recommendation, etc. The 3 million tokens allocated to Reserve have been locked, but it can be decided by the DuckDAO governance community whether to unlock (by the top ten DDIM holders voted).
What are the incubation projects and investment portfolio of DuckDAO?
DuckDAO’s recent incubation projects include the algorithmic stable currency protocol Base Protocol, the asset exchange protocol Bondly Finance and Poolz, the new blockchain consensus protocol GEEQ based on honest proof PoH, and the DeFi platform (integrated lending LaaS, liquidity LPaaS, pledged SaaS and other services) DeFiPie and social currency platform Fyooz.
Among them, the incubated project Base Protocol token BASE achieved an increase of more than 100 times, and GEEQ and DeFiPie also achieved an increase of more than 20 times.
In addition, the official website shows that DuckDAO’s investment portfolio includes the decentralized prediction market protocol PlotX, the decentralized financial payment and remittance platform PlasmaPay, the cross-chain pledge liquidity mining RampDeFi, the open source financial information platform DIA, and the cross-chain DeFi project MANTRA DAO , StaFi Protocol, a decentralized protocol that provides liquidity of mortgage assets, ACDX, a DeFi synthetic asset protocol, Linear Finance, a DeFi project utu that introduces a credit mechanism for DeFi, and PAID Network, a project dedicated to redefining the legal system in DeFi , PolkaCover, a DeFi insurance platform based on Polkadot, and YIELD, a one-stop DeFi investment platform.
In addition, DuckDAO also established the incubator The Foundry with the interoperable blockchain network Ferrum Network, combining DuckDAO’s decentralized financing model with the most influential figures, founders, exchanges, and Ferrum’s DeFi technology. One of Poolz’s investors that completed a $1 million native token private placement round this week is The Foundry.
summary
In summary, DuckDAO provides an investment window for community users in the early financing of the project, and the “unilateral burn” model adopted by its market maker agreement has led to DUCK tokens being deflationary tokens, attracting widespread attention from community users . However, although retail investors can avoid becoming “takers” to a certain extent through DuckDAO, the lack of “endorsement” from large venture capital institutions and the uncertainty in the early development stage of the project are also worthy of attention.
On the other hand, as mentioned in the second and third parts of this article, although DuckDAO claims to be a decentralized incubator, the unlocking proposal of DuckDAO’s DDIM and DUCK’s Reserve (Reserve) can only be proposed by the Duck team. The large DDIM holding address is voted on, which is far higher than the user governance threshold of other DeFi projects in the market, and is far from the so-called concept of decentralization.
