The Innovation of Camelot DEX

If you're familiar with the Arbitrum ecosystem, you'll have heard of @CamelotDEX by now. Let's talk about the features of this Arbitrum native DEX that set it apart.

The focus of this thread will be on the novel features and tokenomic design of Camelot. For a fairly comprehensive look at Camelot, you'll want to read this by @SmallCapScience

Dynamic Directional Fees

Camelot allows for customization of swap fees for both buying and selling. For example, @PlutusDAO_io has recently partnered with Camelot and begun to migrate their $DPX / $plsDPX liquidity.

Buying Fee: 0.001%

Selling Fee: 2%

Nitro Pools

These are fixed duration pool where users can lock their staked positions (spNFTs) for increased yield.

Official Nitro Pools: created by Camelot or verified partners.

Community Nitro Pools: deployable by anyone.

Token Model

Camelot employs a two token model of $GRAIL (liquid) and $xGRAIL (escrowed). Both are used as farming rewards with the majority being in $xGRAIL. At a glance, this is akin to $GMX distribution via $esGMX with some modifications.

$xGRAIL Plugins

This is where the utility of $GRAIL comes into play. In order to reap fees and other benefits, users must allocate $xGRAIL to the desired plugin. $GRAIL was built to keep circulating supply low and users must choose wisely on how to allocate it.

Protocol Earnings

The focus of fee distribution towards LPs is noteworthy. Dedicating 12.5% to buyback and burn is interesting as well given that Tetranode is famously against it.

Deflationary Mechanisms

Buy/Burn Vesting Acceleration In order to convert $xGRAIL to $GRAIL, there is a 6 month vesting period to redeem at 100%. However, users may convert escrowed tokens in a shorter period of time for a reduced token amount.

Vesting Burn Example

If a user wanted to redeem 1000 $xGRAIL with the minimal 14 day vesting period, they would receive there tokens at a 50% ratio and receive 500 $GRAIL. The $xGRAIL that was left behind will be burned and removed from the supply forever.

Concluding Thoughts

Just as @GMX_IO innovated upon the ve- model with the introduction of $esGMX emissions and multiplier points, Camelot has further pushed the envelope. The Camelot team has created a token that is meant to be in use and illiquid.

When liquidity mining first began, token emissions were entirely liquid and used to farm and dump. A new precedent has been set by the Camelot team by focusing on escrowed emissions and token locks to enjoy the utility of a governance token. There will be copycats soon™️.

Dynamic directional fees, nitro pools, and plugins are all compelling DEX features. The tokenomics will see many most copycats as @GMX_IO saw spawn after them.

The transition from liquid emissions to an inclination for escrowed emissions is the future of liquidity mining.