You have to be certified hardware manufacturer if you want to use the USB connection to transmit any data between the iPad and your Mac [2]. So my bet is they either use WiFi ( which can roughly get 60fps on retina resolution ) or Bluetooth 4. In both cases I think the refresh rate would not satisfy in a lot of cases, e.g. playing a YouTube video through their software on the iPad.
1: https://avatron.com/applications/air-display/ 2: https://avatron.com/support/faq-air-display/#toggle-id-13
EDIT:
I've found more information on their facebook page [3]
> To setup, download and open duet on your Mac (for free) and on iOS.
> Connect your device using a lightning or 30 pin cable. Done.
> No need to worry about firewall settings, Wi-Fi speed or your 802.11n network.
> Duet is secure, simple, and allows you to use your iOS and OS X devices in harmony.
So I guess I was wrong with my bets. Maybe they got a hardware manufacturer license from Apple. Anyway launch is on 16th, so let's see.