DR-PE-0.1 · Mechanism Laboratory

PROTOCOL ECONOMICS FRONTIER

What is the smallest sustainable economic toll that can make Duplios highly valuable if DR becomes large, without making DR expensive, illiquid or uncompetitive? Arithmetic research. Not a live fee. Not a forecast.

RESEARCH · SIMULATION · NOT INVESTMENT PERFORMANCE · NOT INVESTABLE · £0 REAL CAPITAL · PAPER

NO LIVE FEES · RESEARCH ONLY · DR IS NOT TRADEABLE · LIVE_FEES = FALSE · MODEL FROZEN = FALSE

Current status

Fee level: none live. Grid is research arithmetic only.
Economic channel: none selected. Secondary CEX royalty is NOT VIABLE without exchange cooperation.
Annual volume / AUM: synthetic scale grids, not observed DR flow.
Gross arithmetic revenue: base × bps / 10,000. Not a forecast.
Estimated friction: shown as annualised bps at stated turnover. Unmeasured in a live market.
Technical feasibility: scored per channel. Collection layer is explicit.
Current status: RESEARCH ONLY. READY TO FREEZE ECONOMIC MODEL: NO.

Question

DR remains PAPER with £0 real capital. This page computes gross protocol revenue as applicable base × bps / 10,000. It does not invent adoption probabilities, does not select a live fee, and does not give the founder unbacked DR.

NO UNBACKED FOUNDER DR
NO HIDDEN DILUTION
NO NEW-BUYER-FUNDS-OLD-HOLDER ECONOMICS
NO FAKE RESERVE ASSETS
NO LIVE FEES
NO SECONDARY CEX ROYALTY ASSUMED

Required arithmetic examples

Independent of channel. Formula only.

1 bp × $1B = $100K
1 bp × $10B = $1M
1 bp × $100B = $10M
1 bp × $1T = $100M
0.5 bp × $1T = $50M
2.5 bp × $1T = $250M
5 bp × $1T = $500M

Do not confuse these bases

DR AUM / economic exposure — use the AUM grid.
DR annual trading volume — use the volume grid. Do not take AUM × fee unless turnover is stated.
DR creation volume — creation fee base.
DR redemption volume — redemption fee base.

Economic channels

Secondary trading royalty

CEX: NOT VIABLE · ON EXCHANGE

Not assumed collectable on Binance or other third-party CEXs. A transfer-tax token is typically incompatible with major CEX listing. Would require exchange cooperation that does not exist and is not applied for.

DR creation fee

CEX: CONDITIONAL · CREATION REDEMPTION

Charged when primary-market DR is created against eligible value. Occurs at the issuer creation layer, not on a third-party order book. Technically feasible if Duplios controls primary issuance. Raises the create-side of the arb band.

DR redemption fee

CEX: CONDITIONAL · CREATION REDEMPTION

Charged when DR is redeemed. Issuer-layer, not an on-exchange tax. Technically feasible. Worse holder alignment than a creation fee: can widen exit cost, impair NAV convergence in stress, and invite listing/regulatory questions.

Annual infrastructure / AUM fee

CEX: CONDITIONAL · ISSUER RESERVE

Accrues at the reserve/issuer level (NAV drag or operating invoice). Does not require CEX royalty support. Standard fund pattern. Directly reduces tracking versus DDEI by approximately the fee.

DDEI / risk-data licensing

CEX: CONDITIONAL · OFF ASSET

Off-asset revenue. Does not tax DR traders. Demand, pricing power and buyers are unproven. AUM grid is a research proxy for licensee scale, not a claim that licensing equals AUM × bps.

Hybrid (issuer-layer mix)

CEX: CONDITIONAL · ISSUER RESERVE

Research mix: infrastructure/AUM charge plus a creation fee. Excludes secondary royalty. Components must be stated separately. Not a selected live model.

Transaction-volume revenue grid

Applies to secondary volume, or to creation/redemption volume if that is the stated base. SYNTHETIC ARITHMETIC.

bps	%	$1M	$10M	$100M	$1B	$10B	$100B	$1T	$5T
0	0%	$0.00	$0.00	$0.00	$0.00	$0.00	$0.00	$0.00	$0.00
0.1	0.001%	$10.00	$100.00	$1K	$10K	$100K	$1M	$10M	$50M
0.25	0.0025%	$25.00	$250.00	$2.5K	$25K	$250K	$2.5M	$25M	$125M
0.5	0.005%	$50.00	$500.00	$5K	$50K	$500K	$5M	$50M	$250M
1	0.01%	$100.00	$1K	$10K	$100K	$1M	$10M	$100M	$500M
2.5	0.025%	$250.00	$2.5K	$25K	$250K	$2.5M	$25M	$250M	$1.25B
5	0.05%	$500.00	$5K	$50K	$500K	$5M	$50M	$500M	$2.5B
10	0.1%	$1K	$10K	$100K	$1M	$10M	$100M	$1B	$5B
25	0.25%	$2.5K	$25K	$250K	$2.5M	$25M	$250M	$2.5B	$12.5B
50	0.5%	$5K	$50K	$500K	$5M	$50M	$500M	$5B	$25B
100	1%	$10K	$100K	$1M	$10M	$100M	$1B	$10B	$50B

AUM / infrastructure revenue grid

Applies only to annual AUM/infrastructure (and as a proxy scale for licensing). Not a trading-fee calculation.

bps	$1M	$10M	$100M	$1B	$10B	$100B	$500B
0	$0.00	$0.00	$0.00	$0.00	$0.00	$0.00	$0.00
0.1	$10.00	$100.00	$1K	$10K	$100K	$1M	$5M
0.25	$25.00	$250.00	$2.5K	$25K	$250K	$2.5M	$12.5M
0.5	$50.00	$500.00	$5K	$50K	$500K	$5M	$25M
1	$100.00	$1K	$10K	$100K	$1M	$10M	$50M
2.5	$250.00	$2.5K	$25K	$250K	$2.5M	$25M	$125M
5	$500.00	$5K	$50K	$500K	$5M	$50M	$250M
10	$1K	$10K	$100K	$1M	$10M	$100M	$500M
25	$2.5K	$25K	$250K	$2.5M	$25M	$250M	$1.25B
50	$5K	$50K	$500K	$5M	$50M	$500M	$2.5B
100	$10K	$100K	$1M	$10M	$100M	$1B	$5B

High-frequency compounding

A tiny secondary fee annualises as fee × turnover. 1 bp × 250 round-trips = 250 bps (2.50%) per year. Do not choose a fee because the $1T column looks attractive.

Fee	1× / year	4× / year	12× / year	52× / year	250× / year
0.1 bp	0.1 bp · NEGLIGIBLE	0.4 bp · NEGLIGIBLE	1.2 bp · NEGLIGIBLE	5.2 bp · LOW	25 bp · HIGH
0.25 bp	0.25 bp · NEGLIGIBLE	1 bp · NEGLIGIBLE	3 bp · LOW	13 bp · MODERATE	62.5 bp · HIGH
0.5 bp	0.5 bp · NEGLIGIBLE	2 bp · LOW	6 bp · LOW	26 bp · HIGH	125 bp · SEVERE
1 bp	1 bp · NEGLIGIBLE	4 bp · LOW	12 bp · MODERATE	52 bp · HIGH	250 bp · SEVERE
2.5 bp	2.5 bp · LOW	10 bp · MODERATE	30 bp · HIGH	130 bp · SEVERE	625 bp · SEVERE
5 bp	5 bp · LOW	20 bp · MODERATE	60 bp · HIGH	260 bp · SEVERE	1250 bp · SEVERE
10 bp	10 bp · MODERATE	40 bp · HIGH	120 bp · SEVERE	520 bp · SEVERE	2500 bp · SEVERE

Impact at 1 bp (research)

Channel	Trader	MM	Spread	Arb	C/R	Tracking	Liquidity	CEX
Secondary trading royalty	MODERATE	HIGH	LOW	NEGLIGIBLE	NONE	NONE	HIGH	NOT VIABLE
DR creation fee	NEGLIGIBLE	NEGLIGIBLE	NEGLIGIBLE	LOW	LOW	NEGLIGIBLE	NEGLIGIBLE	CONDITIONAL
DR redemption fee	NEGLIGIBLE	NEGLIGIBLE	NEGLIGIBLE	LOW	LOW	NEGLIGIBLE	NEGLIGIBLE	CONDITIONAL
Annual infrastructure / AUM fee	NEGLIGIBLE	NEGLIGIBLE	NONE	NONE	NONE	NEGLIGIBLE	NEGLIGIBLE	CONDITIONAL
DDEI / risk-data licensing	NEGLIGIBLE	NEGLIGIBLE	NONE	NONE	NONE	NEGLIGIBLE	NEGLIGIBLE	CONDITIONAL
Hybrid (issuer-layer mix)	NEGLIGIBLE	NEGLIGIBLE	NONE	NONE	NONE	NEGLIGIBLE	NEGLIGIBLE	CONDITIONAL

Binance / CEX reality

Duplios cannot currently collect any of these charges. DR is not listed, not applied, and not tradeable. Collection location matters:

Secondary royalty / transfer-tax: ON EXCHANGE. Not viable as a default on a third-party CEX.
Creation fee: AT DR CREATION LAYER. Conditional. Does not need Binance to pay Duplios.
Redemption fee: AT DR REDEMPTION LAYER. Conditional. Worse stress alignment than creation.
AUM / infrastructure: AT RESERVE/ISSUER LEVEL. Conditional. CEX compatible in the sense that it is not an order-book tax.

Founder economics (research ranking)

Not published as a live founder take. Not optimised for founder income alone.

Model	CEX	Institutional	Alignment	Regulatory	Tax	Governance	Founder upside	Sustainability
F1 — Fee paid directly to founder	1	1	1	5	5	1	5	2
F2 — Fee paid to Duplios operating company; founder benefits through equity	4	4	4	3	3	4	4	4
F3 — Protocol/foundation receives economics and contracts Duplios	4	5	5	4	4	4	3	4
F4 — Hybrid of F2 and F3	4	4	4	4	4	3	4	4

F1: Looks like a personal levy. Hostile to CEX questionnaires, institutions and holder fairness. Not recommended on alignment grounds even if founder income is highest.
F2: Issuer/opco collects infrastructure or primary-market economics. Founder $0 cash at genesis can still have asymmetric upside via ownership if DR scale appears. No unbacked founder DR required.
F3: More protocol-like. Founder upside is indirect (service contract / residual opco). Heavier legal architecture. Not free to freeze without counsel.
F4: Possible later structure. Complexity is itself a cost. Not selectable on founder-income grounds alone.

If the founder contributes $0 at genesis, material asymmetric upside is still possible through Duplios ownership of an operating company that receives issuer-layer economics — without minting unbacked founder DR. Illustration only, 1 bp × $1T applicable = $100M gross. At a 40% cost ratio, illustrative net $60M. Equity capture then scales with ownership. Adoption probability is not invented.

Small-toll frontier

0.5 bp — INSUFFICIENT EVIDENCE TO FREEZE

0.5 bp meets the arithmetic materiality thresholds ($5M at $100B applicable; $50M at $1T) with 12× turnover friction 6 bps. This is a research candidate, not a freeze. Elasticity of volume to fee is unmeasured because DR does not trade.

Revenue-maximising on the tested grid: 100 bps × $1T = $10B. Unconstrained arithmetic maximum on the tested grid. Not a recommended operating fee. High bps maximise the formula and destroy competitiveness.

Issuer-layer creation fee and/or infrastructure/AUM fee; data licensing off-asset. Not secondary CEX royalty. INSUFFICIENT EVIDENCE to freeze.

READY TO FREEZE ECONOMIC MODEL: NO

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