โ๏ธHow Doubler Works
Doubler is designed to establish an innovative and inclusive financial model through smart contracts, with the aim of minimizing investment risks in cryptocurrency ventures.
Based on an analysis of historical trends in high-quality cryptocurrencies such as BTC and ETH (referred to as BTC for consistency), it has been observed that regardless of the purchase price, users can achieve profitability by applying a "martingale" strategy. This strategy involves doubling down on investments if the cryptocurrency experiences a decline, effectively lowering the average entry price and capitalizing on price rebounds. The "martingale" approach has long been employed in the financial industry.
However, executing a comprehensive "martingale" strategy necessitates two conditions:
Having unlimited capital, implying the ability to create currency at will.
Unlimited market capacity capable of accommodating substantial buying and selling volumes.
Considering the practical challenges of fulfilling these conditions, Doubler has been developed utilizing blockchain smart contract technology to embody the essence of the "martingale" concept within the realm of cryptocurrencies.
Operation Logic Diagram:
Doubler harnesses the power of market aggregation, enabling strict adherence to the "martingale" strategy by adding to BTC positions during downturns. This process aims to bring the average purchase price of BTC in the Doubler pool closer to the current market price of BTC, ultimately leading to profitability. Please refer to the following diagram:
When a user creates a Doubler pool, the smart contract utilizes Chainlink/Pyth to fetch the current price of BTC, which is recorded as the cost price. If the price of BTC falls below the user-defined threshold, the pool is opened for additional participants to deposit their BTC. An oracle is used to read the price of the deposited BTC and store it in the smart contract. However, the deposited quantity cannot exceed a predetermined multiple of the previous layer, as depicted in the diagram. This allows for controlled participation and risk management.
In the depicted scenario, the pool is viewed as a collective entity. As more BTC with lower cost prices is deposited into the pool, the average cost price of BTC within the pool steadily decreases. This reduction in average cost is a result of the "martingale" strategy, which involves adding more BTC to the pool at lower prices during downward price movements. As a result, the pool's average cost price converges towards the current price of BTC, enabling potential profitability when the BTC price rebounds.
Distribution of benefits
Next, we will explain how Doubler ensures the interests of all parties, making it attractive for users to become Pool creators or participants in any situation. Based on the description above, we can conclude that when the current price of BTC surpasses the Pool's take-profit price, the Pool achieves its profitability objective. This means that at settlement, the value of BTC in the Pool exceeds the total cash investments made by all users within the agreement, generating a certain percentage of profit. Consequently, when the agreement is settled, we divide the BTC within the agreement into two categories: cost and profit. This covers all user inputs and yields profits.
When creating a Pool, the Creator needs to set the 'Profit Share Ratio' parameter, which determines the percentage of the entire Pool's profit that will be used for the Reward portion of the Pool. After determining the percentage of reward, the whole reward will be divided into three parts: 20% Eco Fee, Creator, and Winner. Except for the 20% Eco Fee which is a fixed value, the Creator and Winner's share of the reward is set by the Creator when creating the Pool.
When the Pool reaches the predetermined Take Profit price, it transitions to the End status, and all participants calculate the number of tokens they can redeem based on the cost price at the time of entry.
The calculation formula for the settlement quantity is as follows:
Settlement Quantity = Initial Price * Initial Quantity / Settlement Price
The Winner Mechanism
Doubler creates external profits through an aggregation of market liquidity using a Martingale strategy-inspired approach. The rewards set in the profit portion are distributed through the Winner mechanism. The final determination of the Winner requires first calculating the number of eligible units for winning, followed by the final Winner interval determination through the train algorithm.
The calculation method for the number of winning units
To encourage users to actively join existing pools, we will distribute a portion or all of the settled profits to users who finally join the pool as an incentive. The specific allocation ratio will be determined by the creator, ensuring that the pool continues to operate according to the parameters set by the creator. To ensure fairness, we will use the "Train" algorithm to determine whether you are in the winning zone:
Based on the provided diagram, it is evident that the capacity of each layer depends on the initial investment quantity made by the pool creator. When the capacity of a layer falls below 200 times the initial injection quantity, the providers of 50% of the settlement layer's quantity will receive the entire profit. Conversely, if the layer's capacity exceeds 200 times the initial injection quantity, regardless of subsequent capacity increases, only providers of BTC equivalent to 200 times the initial injection quantity, who join the final layer, will receive the complete profit. Profit distribution will be conducted using a weighted average method. (Note: The value of 200X units mentioned here is for illustration purposes; in practice, the pool creator sets this value in advance.)
The calculation formula is as follows:
Profit Allocation Quantity = Total Pool Profit / Winning Units * Your Winning Units
Train algorithm
Through the above method, we can calculate the maximum unit quantity to receive Winner rewards in the final layer. However, the final Winner reward recipient in the last layer needs to be calculated using the train algorithm.
The train algorithm causes the Winner reward interval to move within the last layer. The final Winner interval is determined by the difference between the block height of the last incoming unit and the block height generated at the moment of EndPool. This introduces randomness into the entire Winner selection process while retaining an advantage for the latest users to join. Because the Winner interval moves for a certain period, users who join during this time have the advantage of becoming a Winner for a specific duration. Similarly, if you are unfortunate enough to be pushed out of the Winner zone, the train algorithm provides you with the opportunity to become a Winner.
In the V3 testnet, we have set the efficiency of Winner unit movement to be approximately 5 minutes per unit. Based on the block generation time in the Sepolia testnet for the V3 version, we have established that the Winner interval moves by one Winner unit for every 30 blocks of height difference.
This distribution mechanism serves two primary purposes:
As a Pool creator, you can use cryptocurrency assets purchased at any time and price to create a Pool. If the price of the cryptocurrency asset goes up, the returns from holding the cryptocurrency will not decrease. If the price of the cryptocurrency asset goes down, you can leverage the power of the market to significantly reduce your average holding cost, allowing you to acquire more cryptocurrency assets without the need for additional investment. This effectively mitigates the risks associated with cryptocurrency investments. Doubler's existence transforms cryptocurrency investment, a financially risky option, into an extremely stable choice.
As a Pool participant, you have the freedom to choose and participate in any Pool at any time. If you are fortunate enough to join a Pool that reaches its target price, you will receive a very substantial return. If the price drops after you join, like the creator, you will accumulate more cryptocurrency assets during subsequent declines to ensure that the cash value of your investment remains intact. This is a quite profitable investment.
The flexibility of participating in Doubler assets
In the Doubler protocol, users have the ability to redeem their crypto assets at any time in the majority of cases. Once a pool is successfully created, it goes through three states: "ON", "OFF", and "END".
"ON" state
The triggering of the ON state is determined by the price of the target coin, when the Spot Price< Last Layer Open Price, the Pool will switch to the "ON" state, which means that the Pool is currently available for Input, in the "ON" state, except for the Last Layer, any user can redeem the assets. In the "ON" state, any user except the last layer can redeem the assets in advance, and there are two settlement methods for users to redeem the assets in the "ON" state:
When the unit price at the time of input is greater than or equal to the average price of the Pool, the number of assets that can be redeemed by the user will be equal to the number of inputs.
When the unit price at the time of input is less than the pool's average price, the user can redeem a quantity equivalent to the unit price at the time of input multiplied by the input quantity divided by the pool's average price.
"OFF" state
The "OFF" state is triggered by the following two elements, if one of them is satisfied, the Pool will be switched to "OFF" state.
determined by the price of the target coin, when the Spot Price>Last Layer Open Price, the Pool will be switched to "OFF" state.
When the number of coins injected into the Last Layer reaches the capacity threshold of the layer, the Pool will be switched to "OFF" state.
In the "OFF" state, except for the last layer, any user can redeem the assets in advance, in the "OFF" state users redeem the assets will have two settlement methods:
When the unit price at the time of input is greater than or equal to the take-profit price, the user can redeem the full input quantity.
When the input unit price is less than the take-profit price, the user can redeem a quantity equal to the input unit price multiplied by the input quantity divided by the take-profit price.
The token assets deducted due to early redemption of tokens by users' subjective behavior in either state will be used to reduce the average price of the entire Pool assets.
It is important to note that as long as the pool is not in the "END" state, any redemption action by users will cause the average price of the pool to decrease. This is highly advantageous for users who choose to continue their participation in the pool.
"END" state
The "END" state is triggered by the following two elements. When both elements are satisfied, the Pool will switch to the "END" state.
When the Pool Spot Price is greater than or equal to Profit Price, the Pool becomes ENDable.
When the above conditions are met, anyone can trigger a switch to the "END" state via the front-end or contract.
In the "END" state, all users can withdraw the crypto assets they have invested.
The calculation is as follows: Initial Price * Initial Quantity / Settlement Price.
Leverage
Doubler's leverage function is primarily used to amplify the amount invested by users during Input, increasing the likelihood of becoming a Winner and maximizing the amount of native currency earned during price downturns. However, it also proportionally increases the risk, leading to potential additional losses in the native currency. Unlike other financial instruments that offer a fixed maximum leverage mode, the maximum leverage that Doubler can provide depends on the parameters of the Pool the user plans to enter and the difference between the current Pool's settlement price and the current market price. Once the maximum leverage is calculated, users are free to choose whether or not to use leverage and at what level.
Note:
1.When utilizing the leverage function, if the current layer's capacity does not meet the user's maximum leverage multiplier requirement, the actual leverage multiplier used will prevail.๏ผIn V3, we are limiting it to a maximum of 2x๏ผ
2.The "0.8" in the above formula is the safety factor.
The mechanism of Doubler ensures that users have flexibility in their investments regardless of the timing, pricing, or identity associated with their participation. It is akin to a demand deposit account in a bank, while offering the potential for returns that far exceed those of traditional bank deposits.
Through Doubler, our objective is to enhance the reliability of cryptocurrency investments and promote the transformation of mainstream cryptocurrencies such as BTC and ETH into safe-haven assets. Only by achieving this can we foster wider acceptance of cryptocurrencies. Doubler is not merely a DeFi product; it represents a movement, a battle against market manipulators. We will no longer passively tolerate their unscrupulous market manipulations. Instead, we strive to empower market forces to act as a divine entity, justly judging their actions and ensuring that those engaged in malicious market manipulation suffer significant losses.
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