Despite the term “key”, I think (certainly hope so – maybe dev can confirm) that this is a password/passphrase that you just choose per usual advice to reduce guessing attacks.
Possibly the terminology is a holdover from an earlier design intent which had to change:
Regardless, typical encryption methods do need a key, but they make it from user input.
In cryptography, a key derivation function (KDF) is a cryptographic algorithm that derives one or more secret keys from a secret value such as a master key, a password, or a passphrase
So your job is to pick a reasonable secret, and let Duplicati use it to make an internal key.