# FAQ

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### 1. Why using Copycat DEX?

🌊The on-chain derivatives sector is a promising blue ocean market. However, it is still in its early stages of development and faces the following challenges:\
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**1. Poor Trading Experience** \
Channel funding revenue equally with other node holders.\
**2. Liquidity Mechanism Deficiencies** \
Derivative agreements are prone to liquidity crises amid violent fluctuations.\
**3. High Transaction Fees** \
The transaction fee rate usually exceeds 0.1%, which could be unfriendly for large-quantity traders.\
**4. User Fund Security** \
Centralized derivatives exchanges are prone to freezing funds and risk of running away.\
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💡Copycat Dex is an innovative Peer to Pool derivative protocol based on the PVPAMM mechanism. It has built the PNL Pool model and the CUD bond, creating a unique liquidity system for users to experience, efficient, quality trading.\
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There are three major benefits of Copycat DEX:\
**1. Adoption of "PVPAMM" trading mode, enabling users to provide liquidity to each other.**\
**2. Combining the benefits of CEX and DEX, quickly open and close positions, Market and Limit Orders; Adding and Decreasing Margin, one-click subscription reminders and other innovative features.**\
**3. Lowest transaction fees in the industry 0.02% - 0.03% , providing users with an economically efficient trading environment.**

### 2. Who provides the initial liquidity for Copycat DEX?

&#x20;Copycat DEX's official team will provide the initial liquidity.

### 3. Which wallets and blockchains are supported by Copycat DEX?&#x20;

Copycat DEX supports BinanceWallet, Metamask, OKX Wallet, Bitkeep, TrustWallet and Gatewallet for now. In the future, we will support more wallets. You can use Copycat for trading with any wallet that can connect to the platform. Currently, Copycat DEX is deployed on the Binance Smart Chain (BSC) network, and you can use BNB as the gas fee for transactions.

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### 4. How will CAT token appreciate in value?&#x20;

The appreciation mechanism of the CAT token is based on the unique point-to-pool trading model of the Copycat platform. In this model, a portion of the profits from the Profit and Loss (PNL) pool is used for CAT token buybacks, which are then stored in the platform's insurance vault. Our strategy relies on in-depth analysis using contract big data models, which indicate that the profit trends of the PNL pool align with market trends. Therefore, this buyback mechanism not only enhances CAT's market value but also provides continuous value empowerment to the token, promoting its long-term appreciation.

### 5. What can Copycat DEX do when there is insufficient liquidity in the PNL pool?&#x20;

In such a situation, the platform will automatically issue CUD tokens, which can be exchanged 1:1 with USDT when liquidity is sufficient. After the exchange, CUD tokens are automatically burned. Additionally, CUD holders can earn interest from the platform by staking their CUD during the holding period, with interest earnings typically higher than other DeFi platforms. Furthermore, users holding CUD can use them to open positions for trading, adding more flexibility and profit potential. These features make CUD not only a liquidity tool but also an investment vehicle with multiple advantages.

### 6. How does Copycat address long-term liquidity shortages?&#x20;

The platform employs a special asset insurance vault and, in extreme cases of prolonged liquidity shortages, compensates users with funds from the Copycat Foundation and repurchased tokens. When long-term liquidity shortages occur, such as CUD holders not receiving compensation for more than 15 consecutive days, assets from the vault will be added to the PNL pool for redemption.

