What is ducklend?

Last Updated on Oct. 12, 2024

Introduction

Ducklend is the first decentralized pawnshop, allowing users to issue covered options on the Solana /Sui blockchain and trade them unlimited.

Decentralized statement

In the present landscape, Wall Street behemoths and centralized trading platforms are quietly accumulating vast reserves of Tokens in the shadows, far from the blockchain's transparent ethos. Meanwhile, unsuspecting users lend out their Token rights, oblivious to the possibility that these very tokens might be wielded against them in shorting maneuvers.

We introduce "Ducklend," a revolutionary covered call option mechanism in response to this clandestine manipulation. This innovation empowers users to leverage and champion on-chain assets through our unbridled, permissionless protocol. Dubbed the "On-Chain Turbo Boost," Ducklend is poised to catalyze a significant upsurge in the valuation of on-chain assets, igniting a virtuous cycle of growth and prosperity.

It's time to rally. Let's reclaim and anchor our assets firmly on the blockchain, cornering the old guard and ushering in a new era of transparency and decentralization.

The moment has come to rekindle the splendor of on-chain dynamics and the foundational principles of decentralization. Join us in this pivotal movement.

Decentralized covered options

• Covered options definition.

A covered call is essentially a financial tactic where an individual who already possesses certain stocks opts to sell the right, but not the obligation, to purchase these stocks at a predetermined price in the future.

Consider you own a collection of shares, and you decide to sell someone the option to buy these shares from you at a fixed price next month. If they choose to buy, you’re prepared because you own the shares. By selling this option, you earn some additional income, regardless of whether they decide to buy the shares. It’s a method to generate revenue from your stocks while retaining them.

• On-chain covered call options.

Applying this to Solana (or Sui) introduces a digital aspect to the strategy. Suppose you hold Solana tokens and decide to sell someone the right to buy these tokens from you at a specific price. This right is referred to as a "call option."

By offering this call option, you’re effectively stating, "I’m providing you the opportunity to purchase my Solana tokens at this price on or before a set date." If the price of Solana rises above the price specified in the option, the buyer may opt to "exercise" their option to purchase your tokens at the lower price, thereby making a profit. On the other hand, if the price doesn’t surpass the specified price, they may allow the option to expire, and you retain your tokens plus the income from selling the option.

This approach is named a "covered call" because your possession of the Solana tokens fulfills the obligation to deliver these tokens if the option buyer decides to exercise the option.

It’s a strategy to earn additional income from your Solana holdings, with the understanding that you may need to sell your tokens at the agreed price if the option buyer decides to proceed with the purchase.

Ducklend Protocol

• What is the Ducklend Protocol?

The Ducklend protocol is an ingenious Defi mechanism that interacts with a liquidity trading pool controlled by smart contracts and a decentralized pawnshop to achieve a completely decentralized covered options platform.

• What kind of platform are we not?

We are not a lending protocol. Lending involves forced liquidation, which can be quite unfair in the volatile cryptocurrency market, where a 30% drop followed by an instantaneous recovery is not uncommon. Such volatility could unjustly liquidate a user's position due to a sudden price spike. We have addressed this issue to enhance user experience. Unlike lending protocols, where the backers are creditors, in our system, it's the option sellers who stand behind. The risk associated with collateral volatility is a burden that the buyer must bear.

We are not an order book-based options exchange. Traditional 1-on-1 option trading, due to its limited user base, often results in a low transaction success rate. To mitigate this, platforms hedge in centralized pools, absorbing most orders. Contrary to this, we place option sellers in a pool, eliminating any platform intervention in matching buyers' orders, thus ensuring transparency. This significantly improves the experience for those selling options.

We are not the "dictators" of options. Many nominally decentralized platforms employ a not-so-decentralized approach to forming liquidity pools. They secure liquidity by selling tokens to users, and platform representatives then sell options to buyers, often earning fees beyond the scope of service. They act as the so-called "dictators" of decentralized options.

• Why trade on Ducklend?

As a liquidity provider, you can earn transaction fees, option premiums, and liquidation fees by injecting liquidity.

As an options trader, hedging with options allows you to mitigate the risk of missing out on market movements. If you want to leverage on-chain, options provide similar market exposure to owning an asset directly but require less capital. This allows for greater leverage and flexibility in your portfolio.

Duckcoin

Duckcoin is the cornerstone of governance and utility within the ecosystems of Duck.ex and Ducklend, two innovative platforms in the decentralized finance (DeFi) space. As a governance token, Duckcoin empowers its holders with a suite of privileges and responsibilities that are pivotal to both platforms' operational and strategic directions.

Token address: DUCKexs9TX299vBuxphiZNYPisw1A9kntH8WRi5sy8LV

Protocol, Interface, DAO​

To begin with, we should clarify the distinctions between the different areas of "Ducklend," some of which may confuse new users.

• Ducklend Labs: The DAO which developed the Duck Exchange protocol and Ducklend protocol, along with the web interface.

• Duck Exchange Protocol: A suite of persistent, non-upgradable smart contracts that create an automated market maker, a protocol that facilitates peer-to-peer market making and swapping of tokens on the Solana and Sui blockchain.

• Ducklend Protocol: A suite of persistent, non-upgradable smart contracts that together create a decentralized pawnshop, a decentralized covered call option trading protocol that allows market participants to issue covered call options, publish them for sale in the market, and provide settlement services.

• Ducklend Interface: A web interface that allows easy interaction with the Ducklend protocol. The interface is only one of many ways to interact with the Ducklend protocol.