Dual Investment Overview

Dual Investment is an innovative trading strategy that allows investors to capitalize on market movements by simultaneously taking two opposite market positions. This approach involves choosing either a "Buy Low" or "Sell High" position to maximize potential returns, depending on future price movements. By leveraging both sides of the market, Dual Investment offers flexibility and opportunities to earn rewards regardless of market direction.

Mechanism

The Dual Investment product on Prodigy.Fi operates through decentralized vaults, each with specific terms like yield opportunities, linked prices, and expiration dates. Here's how the lifecycle of a vault unfolds:

1. Vault Creation

   Any user (Vault Creators) can create a vault by setting the vault parameters such as asset pair, direction, linked price, yield, expiry, and quantity. The Vault Creator also provides the necessary liquidity to fund the vault. This action automatically generates a smart contract for the vault and lists it on the platform for discovery.

2. User Participation

   Other users (Subscribers) discover the vault in the "All Investments" table by filtering based on their preferred asset pair and direction. They review the vault's details, such as the linked price and yield, and, if interested, subscribe by depositing the required asset.

   • Buy Low: Users who believe the price of an asset will drop in the near future can choose a "Buy Low" vault. This option allows them to buy the asset (e.g., WBTC) at a linked price lower than the current market rate, with the added benefit of earning a yield on their deposit until the expiration date.

   • Sell High: Users who anticipate the asset’s price will rise can opt for a "Sell High" vault. This strategy enables them to sell the asset at a linked price above the current market rate, also earning yields on their deposit while waiting for the vault to expire.

3. Earning Yields

   Throughout their participation, Subscribers earn yields based on the rate set by the vault creator. This yield accrues until the vault reaches its expiration, providing a return on investment regardless of the market outcome.

4. Expiration and Settlement

   When the vault reaches its expiration date, the smart contract automatically retrieves the last posted market price for Bitcoin from the Chainlink oracle at the designated expiration time (16:00 UTC+8). Based on the vault's direction ("Buy Low" or "Sell High") and the linked price, the smart contract determines the settlement.

   • If the market price meets or exceeds the linked price, the transaction is executed at the specified linked price and Subscribers receive their corresponding assets.

   • If the market price does not reach the linked price, the Subscriber’s initial deposit is returned, but they still keep the yield earned over the period.

5. Fund Distribution

   One hour after expiration, the smart contract distributes the settled funds to both the Subscribers and the Vault Creator, making them available for withdrawal.

6. Withdrawal and Completion

   Subscribers and the Vault Creator withdraw their respective funds from the vault. Once all funds have been withdrawn, the vault is considered "settled" for all participant.

(Optional) Liquidity Adjustment:

The vault creator has the option to withdraw any remaining, unused liquidity from the vault at any time. This action removes the vault from the "All Investments" table, preventing further subscriptions. However, all existing subscriptions are honored and processed according to the vault's terms on the expiration date.