What is Duality?

An Introduction

Duality’s mission is to give liquidity providers superpowers by creating sustainable and powerful financial markets. Duality is introducing a novel mechanism design which combines the advantages of AMMs and order books. On Duality, LPs and teams can run strategies with ease, enjoy better prices, and capture MEV profits.

Overview

Duality, at its core, is a novel AMM design. We are also building a set of features around the AMM in order to enable powerful and sustainable financial markets. At the core of the AMM lays an incredibly simple swap mechanic: liquidity pools that allow traders to buy or sell tokens at a constant price.

Constant-price pools enable a new level of simplicity, flexibility, and capital efficiency which benefits liquidity providers and traders alike. Reasoning about external use cases and core features becomes much easier, leading to an enhanced, simplified user experience.

Flexible

Duality is the one-stop shop for any payoff or trading style.

Traders can choose between market orders and limit orders.

Liquidity providers can replicate any feasible AMM curve (liquidity distribution) by strategically choosing prices and the distribution of liquidity across them.

While two liquidity providers on Duality may prefer completely different liquidity distributions, they will still use the same underlying pools. The only difference is the amount deposited in each pool. We call this feature shared liquidity because it has numerous advantages, such as reducing liquidity fragmentation and increasing the cost of price manipulation for traders and liquidity providers.

Better Prices

Duality’s mechanism design is extremely capital efficient since liquidity providers can arbitrarily concentrate their liquidity on a single price. If there is enough liquidity at the peg price, traders can benefit from true zero-slippage swaps on stablecoins and highly correlated assets (e.g., staked<>non-staked pools).

Duality has also implemented dynamic routing to further give traders better prices. Most routers calculate and broadcast the path(s) that a trade should take before the trade is executed. This reveals dangerous information to searchers who can sandwich or front-run the broadcasted route. As a matter of fact, because the prices of pools are volatile, the run-time route is likely no longer the optimal route.

With Dynamic Routing, Duality only reveals the in-token and out-token in the mempool, and finds the best path(s) when the trade is executed. Thus if the price moves because of volatility or because someone is trying to front-run your trade, your route will respond in real time to find the next best route.

App-Specific Infrastructure

Computer scientist Alan Kay famously said that those who are serious about software build their own hardware. We believe that people who are serious about exchanges own their whole stack.

App-chains (and soon app-rollups) open up a rich design space of unexplored possibilities that can solve some of DeFi’s most urgent problems.

1. MEV protections can be implemented at the consensus level and/or expressed through more complex application logic, which is not reasonable on generalized smart contracting chains.

2. Expensive transactions fees and network congestion become less of an issue with app-specific infrastructure.

3. New incentive schemes based on order flow and fee markets can put an end to DeFi’s unsustainable token emissions models.

Duality strives to be a hub of innovation for pushing the boundaries of what is possible with app-specific infrastructure.