> 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/economic-sustainability.md).

# Economic Sustainability

Duce operates as a hybrid-closed-loop system where:

* All funds come solely from yield, reserve and investor deposits.
* There is no reliance on external capital, ensuring self-sustainability.

**Surplus Distribution**

When market conditions generate surplus yield, the protocol distributes the excess proportionally among investors.

**Shortfall Management**

During periods of lower yield, the dynamic adjustment algorithm ensures that investors receive at least their principal, with any bonus proportionally reduced.

Tokenomics

The future DUCE token will play a critical role in:

* **Governance:** Allowing stakeholders to vote on protocol upgrades and parameter adjustments.
* **Utility:** Serving as the medium for on-chain interactions and staking, further reinforcing the hybrid-closed-loop ecosystem.


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