Camelot: the Next Curve for Customisable DEX? | TKX Weekly

6 min readDec 11, 2022

Part I. Camelot

Although Arbitrum hasn’t launched its token, the season has already been gaining traction. All the infrastructure-level protocols have been deployed on Arbitrum and GMX acts as its creative super-app. Camelot, as a DEX with its new ideas, wants to challenge the big two.

Intro

Camelot is an ecosystem-focused and community-driven DEX built on Arbitrum. As a highly efficient and customizable protocol, Camelot allows both builders and users to leverage their custom infrastructure for deep, sustainable, and adaptable liquidity. Camelot recently closed a public sale, raising $3.8M, with a circulating market cap of $5.7M.

As an ecosystem-focused native DEX on Arbitrum, Camelot has partnered with other native Arbitrum projects like GMX, GMD, Abracadabra, etc. The key partnership with GMX includes setting up an incentivized GMX-USDC liquidity pool which can help boost both Camelot and GMX’s TVL.

Dual AMM

Camelot AMM is a dual-liquidity AMM, based on both UniV2 and Solidly curve.

For volatile pairs (non-stable swap), it uses the standard constant product formula:

For stable pairs, it uses Solidly curve formula:

Dynamic directional fees

Camelot pairs can be configured with different fees depending on the swap direction, for example, 0.05% for buying and 2% for selling. The adjustable fee gives the flexibility to customize users’ needs. An established project can set a low fee to reduce friction and newly launched projects can set a high selling fee to limit selling pressure.

Staked Positions (spNFTs)

Camelot introduces a brand new liquidity approach based on non-fungible staked positions, called staked position NFT. spNFTs can be minted by wrapping LP tokens. Every wrapped LP has a lock setting (max lock duration, max lock multiplier). A lock will provide a yield bonus based on its multiplier if the position’s LP is incentivized. Once it is locked, it will be impossible to withdraw until the end of the lock.

Duel Token Model

$GRAIL is Camelot’s native token and $xGRAIL is a non-transferable escrowed governance token corresponding to staked $GRAIL. $xGRAIL is a yield-earning token. Both $GRAIL and $xGRAIL can be earned from spNFTs.

$GRAIL can freely convert into $xGRAIL in 1:1, but $xGRAIL can only be redeemable through vesting, the ratio of conversion depends on the vesting duration (15 days: 1:0.5, 6 months 1:1). $xGRAIL can be allocated into different plugins to earn different rewards.

Protocol Earnings

60% for LPs
22.5% in dividends redistributed to $xGRAIL holders
12.5% dedicated to $GRAIL buyback and burn
5% to the core contributors funds

Final Thoughts

The innovation is overall limited, but the spNFT model can be an example for other DEX when they design their new model.
spNFTs act as an additional layer for the protocol to add locks to their liquidity. Even though NFTs are less liquid, spNFTs can still be potentially re-used in other protocols like how other Arbitrum protocols re-use GLP.
The dual token model is similar to the ve-model and the GMX model, which can smooth the emission curve of $GRAIL. Such tokenomics heavily skew towards $xGRAIL as a yield-earning token. Such a model will play out quite well in the short to mid-term, but in the long-term, the protocol revenue needs to be up-trend to sustain the price.
The team’s strategic plan focuses on partnership with other naive Arbiturm projects. In half month, the TVL is increased to close to $18M, which can be interpreted as a good start.

Part II. Market Updates

Feds investigating FTX founder SBF for possible market manipulation: NYT
U.S. prosecutors are probing into whether FTX founder and former CEO Sam Bankman-Fried could have manipulated the prices of TerraUSD and Luna cryptocurrencies earlier this year to benefit his businesses. The prosecutors are looking into whether Bankman-Fried could have “steered” the prices of algorithmic stablecoin TerraUSD (UST) and its associated token Luna (LUNA).

Chainlink staking is now live, a major step in its new Economics 2.0 plan
Staking for Chainlink is now live on Ethereum. Until now, token holders had been limited in how they could put their LINK to work and receive rewards for securing the network. With staking enabled, holders of LINK can contribute to the network’s security and receive rewards.

Ledger debuts new device designed by iPod inventor Tony Fadell
Hardware wallet developer Ledger is releasing a new device designed by Tony Fadell, the inventor of the iPod and co-creator of the iPhone, at a time when the company is boasting record sales.
Ledger’s new credit card-sized device is named Ledger Stax. It’s set to launch next year and will be priced at $279, a markup from its Ledger Nano X, which currently retails at $149.

ConsenSys intends to store MetaMask user data for only seven days
ConsenSys clarified that it plans to only store and retain user IP addresses and wallet data for up to seven days. This is an attempt to reassure users that their personal information is being handled securely, after it saw a backlash when it first said it was collecting such data.

Circle and SPAC Concord mutually terminate business combination
Circle and publicly traded special purpose acquisition company Concord Acquisition Corp mutually ended their proposed business combination after the deal “timed out.” The business combination was initially proposed in July 2021. It was later amended in February 2022. Both companies’ boards of directors have approved its termination.

Part III. Fundraising News

The Mirror — Game maker
Raised $2.3M in a pre-seed funding round led by Founders Fund. Other investors include Konvoy Ventures, Abstract Ventures, Florida Funders and Palm Tree Crew.

Perennial — DeFi derivatives protocol
Raised $12M in a seed funding round led by Polychain Capital and Variant. Other investors include Archetype, Coinbase Ventures, Scalar Capital, Robot Ventures, A Capital and others.

Bitwave — Crypto-focused tax and accounting platform
Raised $15M in a Series A funding round led by Hack VC and Blockchain Capital. Other investors SignalFire, Valor Equity Partners, Arca, Pulsar Trading and Alumni Ventures Blockchain Fund.

Panoptic — Uniswap-based DeFi protocol
Raised $4.5M in a seed funding round led by Gumi Cryptos Capital. Other investors include Uniswap Labs Ventures, Coinbase Ventures, Jane Street and Avalanche Foundation’s Blizzard.

Metagood — a for-profit social impact NFT startup
Raised $5 million in its pre-seed round. Investors include Animoca Brands, Morgan Creek Capital founder and CEO Mark Yusko, and Virgin Group investment manager Freddie Andrewes.

Reference

https://docs.camelot.exchange/
https://defillama.com/protocol/camelot
https://twitter.com/SmallCapScience/status/1598114097245003778
https://camelotdex.medium.com/

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Note: TKX Capital do not offer any financial advice for retail investors and we have no affiliation with projects in this research.