Strategies
What are the best strategies for Dual Investment?
Welcome to Dual Investment Strategies Docs! Here, we provide strategies tailored for both beginners and pro traders to help maximize returns in the ever-evolving DeFi landscape. From creating Dual Investments based on market trends to leveraging market price for buying or selling crypto. Let's dive into these strategies and enhance your DeFi experience with Duals.
Beginner
If you believe that the price will go up, then the best option is to create a Dual Investment with stablecoins USDT, USDC, or BUSD as an entry ticker.
If you believe that the price will go down, then you should create a Dual Investment with crypto BTC, ETH, BNB (and other cryptos) as an entry ticker.
In a ranging market, your entry ticker doesn’t matter; you will still be rewarded for locking your tokens
Pro
If you would like to buy crypto by the market price or increase your stables you may create a Dual Investment with stables and you will receive crypto with a discount or your stables with profit.
If you would like to sell crypto at a high price or increase your crypto you may create a Dual Investment with crypto and you will sell crypto at a better price or increase your crypto.
Examples of Dual Investment Strategies
Example 1: Investing with BTC, price increases, or the same
The User creates a Dual in BTC/USDT with 1 BTC, 24 hours, 200% APR, and $70,000 entry price.
Closed Price after 24 hours is $70,010.
The User will receive 70,383.56 USDT
Where 70,000 USDT is the body, and +383.56 USDT is the profit.
Example 2: Investing with BTC, price decreases
The User creates a Dual in BTC/USDT with 1 BTC, 24 hours, 200% APR, and $70,000 entry price.
Closed Price after 24 hours is $69,000.
The User will receive 1.005479 BTC
Where 1 BTC is the body, and +0.005479 BTC is the profit.
Example 4: Investing with USDT, price increases, or the same
The User creates a Dual in BTC/USDT with 70,000 USDT, 24 hours, 200% APR, and $70,000 entry price.
Closed Price after 24 hours is $70,010.
The User will receive 70,383.56 USDT
Where 70,000 USDT is the body, and +383.56 USDT is the profit.
Example 5: Investing with USDT, price decreases
The User creates a Dual in BTC/USDT with 70,000 USDT, 24 hours, 200% APR, and $70,000 entry price.
Closed Price after 24 hours is $69,000.
The User will receive 1.005479 BTC
Where 1 BTC is the body, and +0.005479 BTC is the profit.
Risk Scenarios
Scenario 1: Rising Market and BTC as Input Ticker
If you invest in a Dual Investment product using BTC as your input ticker and the price of BTC rises significantly above your entry price, your return will still be calculated based on the entry price, leading to an opportunity cost.
For example, if you invest 1 BTC with an entry price of $70,000, and the price of BTC at the end of your Dual is $71,000 (above the entry price), your return will be based on the entry price, resulting in an opportunity cost of $1,000 minus your earnings from the product.
Scenario 2: Falling Market and USDT as Input Ticker
Similarly, if you invest using USDT as your input ticker, and the price of BTC falls significantly, your return will be in BTC. If the price of BTC continues to fall after the settlement, it could lead to potential losses.
For instance, if you invest $70,000 USDT with an entry price of $70,000, and the price of BTC at the end of your Dual is $60,000 (significantly below the entry price), you'll receive BTC based on the entry price. The value of your output amount will be $60,000 plus earnings from the protocol. If the price of BTC continues to fall, it could result in an opportunity cost when you convert back to USDT.
Spread Nuances
When initiating a trade, it's vital to recognize that the price can vary based on the chosen input token. This change stems from slippage that transpires when balancing this specific token within the liquidity pool. Spread, or markup, becomes significant only when the output ticker is not equal to the input ticker. Simply put, if the ticker stays the same, there’s no spread, which is advantageous for traders.
This interplay may appear intricate, but it's essential to be aware of it, especially when thinking of switching the input token to its counterpart. Such a decision accentuates the effect of this spread on the trade's final result. Trading with this understanding in mind can lead to more informed and potentially profitable decisions.
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