> For the complete documentation index, see [llms.txt](https://duce.gitbook.io/duce/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://duce.gitbook.io/duce/getting-started/duce-economic-model.md).
# Duce Economic Model
**Mathematical Framework**
The Duce protocol operates under a closed economic model where:
* **Total Funds Available = Accruel yield + Reserve + Sum of Deposits.**
* Each investor is guaranteed a return calculated as;
\
**Return = Deposit × 1.20 (20% minimum instance possible).**
**Role of Reserved Capital**
The reserve serves to bootstrap liquidity and mitigate risk, providing the necessary capital cushion for sufficient and smooth operation.
* **Bull Market:** High yield generates surplus beyond the guaranteed 1.2× return.
* **Bear Market:** Yield may temporarily fall short; the dynamic adjustment mechanism ensures investor principal is preserved while bonus payouts are proportionally adjusted.
**Autonomous Distribution Flow**
A flowchart depicts the FHE-driven process for:
1. Accumulating investor deposits.
2. Executing the blind investment strategy.
3. Computing yield via encrypted algorithms.
4. Distributing the computed yield to achieve a 1.2× return per investor.
---
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