Camelot

Market Making

Camelot is a community-driven DEX on Arbitrum that offers a highly customizable and composable protocol for liquidity provision.

Risk Rating
Watch Out
Protocol Code Quality
Protocol Maturity
Protocol Design
Summary
What we like
Camelot supports the growth and development of the Arbitrum ecosystem by providing a launchpad for new projects and a platform for existing ones to gain exposure and liquidity.
What we like less
Camelot has a complex dual-token system that may confuse some users and create friction in the user experience. The exchange uses two tokens, GRAIL and xGRAIL, which have different functions and benefits, and require a vesting process to convert between them.
What it means for you
Allows you to enjoy a fast and cheap trading experience on Arbitrum with access to a wide range of tokens, while also earning rewards from yield farming, nitro pools, and spNFTs.
Information
Exploit/Hacks
None
Info
  • Website
  • Token: GRAIL
  • Tags: Market Making
Key Metrics
  • TVL: $39.4M (Rank #95)
  • TVL Ranking by Market Making: #0
  • Blockchain: Arbitrum
  • Chain TVL
    • Arbitrum: $39.4M
Risk Assessment
Watch Out
Protocol Code Quality
  • Code reviewed by at least one experienced auditor; Paladin audited in October 2022
  • Anonymous team reduces transparency
  • No documented protocol hacks since launch
Protocol Maturity
  • Latest protocol version launched in 2023; maturity over nine months reduces technical risk as smart contracts are sufficiently battle-tested
  • Top 5% by total value locked reduces risk
  • Multisig wallet controls protocol upgrades
  • Multisig consists of less than 4 signers, which makes the protocol more susceptible to centralization risks
  • No timelock exists or no information documented, which mean a malicious actor could approve upgrades without any delay
  • Low voting power concentration reduces risk
Protocol Design
  • No death spiral concerns
  • This protocol is susceptible to risks related to decentralized exchanges (DEXs), such as impermanent loss
Things to know about Camelot

How Camelot works

Camelot uses a dual AMM model to facilitate trading for both regular tokens and stablecoins. The dual AMM model consists of two types of pools: volatile pools and stable pools. Volatile pools use the constant product formula (x * y = k) to calculate the swap prices for regular tokens, while stable pools use the constant sum formula (x + y = k) to calculate the swap prices for stablecoins or pegged tokens. The exchange also allows protocols to define structured trading fees within their pools, such as dynamic directional fees, which can vary depending on the direction of the swap and help optimize the pool performance and incentivize liquidity provision. Moreover, Camelot introduces a novel concept of spNFTs, which are wrapped liquidity tokens that give more options to liquidity providers. They can create lock durations for liquidity and receive a yield boost, or use their spNFTs in other features of Camelot, such as nitro pools or launchpad. The nitro pools are special pools that offer extra rewards for staking spNFTs and can be created by any protocol or project on Arbitrum without any permission or intervention from Camelot. The launchpad is a feature that helps new projects on the Arbitrum ecosystem to conduct token public sales and raise funds from the Camelot community, while also offering various benefits for the participants, such as exclusive access to new projects, referral rewards, and yield boost for staking xGRAIL tokens. Camelot also has a dual-token system that uses GRAIL and xGRAIL tokens, which have different functions and benefits for the users. GRAIL is the governance token that allows holders to vote on proposals and decisions affecting the protocol. xGRAIL is the dividend token that allows holders to receive a share of the trading fees generated by the protocol. xGRAIL can also be used to boost the yield of spNFTs or participate in the launchpad.

How Camelot makes money

Camelot collects transaction fees from its DEX and launchpad features. The main fees come from the launchpad projects or the fees generated by the spNFT or nitro pool users. The distribution of the revenue collected is as follows: 60% goes to liquidity providers (LPs), 22.5% in dividends redistributed to xGRAIL holders, 12.5% is used to buyback and burn GRAIL, and 5% goes to the Core Contributors fund. The Core Contributors fund is exclusively used to cover the team's operational expenses. Any unused amount will be reallocated every month towards either dividends redistribution to xGRAIL holders or for GRAIL buyback and burn, at the team's discretion.

How you make money on Camelot

You can provide liquidity to the DEX and earn rewards from swap fees, farming incentives, and nitro pools. You can create a staked position (spNFT) by adding liquidity to a pool and locking it for a certain period of time. This will give you a share of the swap fees generated by the pool and also farm incentives in xGRAIL tokens. You can also boost your farming incentives by using the yield booster plugin, which allows you to use your xGRAIL tokens to increase your yield multiplier. Additionally, you can deposit your spNFT into a nitro pool, which is a special pool that offers extra rewards for staking spNFTs. The nitro pools can be created by any protocol or project on Arbitrum without any permission or intervention from Camelot. The nitro pools may offer different rewards depending on the pair, such as GRAIL, xGRAIL, or other tokens.