Title: SIP-22: Camelot x Sperax Partnership
Author(s): IronBoots, Myrddin
Reference: Telegram group + calls
Created: 17/11/2022
Labels: #LiquidityMining, #YieldStrategy, #USDsUseCase
Simple Summary
This proposal will forge the initial partnership between Sperax and Camelot DEX, enabling the growth and expansion of USDs utility on Arbitrum. Camelot aims to become the native Arbitrum DEX; therefore, this proposal will establish Sperax as a core launch partner. USDs will be one of the first stableswap pools on the Camelot DEX, thereby giving it an advantageous position to increase both activity and TVL. Camelot is committed to providing liquidity mining incentives through our farms and genesis pools, as well as development work for the future integration of the Camelot protocol within the Demeter app.
Camelot commitments:
- Camelot to allocate 2.5% (0.25% of total supply) of its partnerships emissions to Sperax. 6 months cliff and two years vesting.
- Camelot to allocate 3% (0.2% of total supply) of its genesis pools emissions to SPA/USDs and USDs/USDC pools.
- Camelot to create and incentivize SPA/USDs and USDs/USDC farms after its launch
- Camelot to provide native integration and support to USDs and SPA
Sperax commitments:
- Sperax to incentivize genesis pools with SPA rewards ($30k value)
- Sperax to match the normal farm incentives with SPA ($ value TBD after launch)
- Camelot and Sperax to engage in a collaborative marketing effort
Abstract
Camelot is a highly efficient DEX building liquidity infrastructure to support Arbitrum native protocols. The Camelot protocol is specifically designed to provide other builders with permissionless options to manage and incentivize their liquidity. Protocols can set custom fees per pool, as well as buy/sell directions, and most importantly, they can have a high level of control over their emissions through our Nitro pools.
Nitro pools allow protocols to provide rewards to pools (or single-staked assets) based on varying requirements, for example, only for LPs that have locked for +3 months or have deposited a certain amount. These Nitro rewards can be in any token and are additional to the base $GRAIL yield rewards. This level of optionality means that protocols can build deep liquidity that is sustainable and long-term.
Camelot aims to support native protocols to achieve more effective returns on their liquidity strategies while allowing the community and users to earn even further yield by being long-term lockers. Most importantly, we are committed to developing our liquidity infrastructure with other Arbitrum protocols - for example, the custom integration within Sperax’s Demeter app.
Motivation
Deep liquidity and utility for a native stablecoin are essential for any ecosystem, making Camelot and Sperax aligned by allowing USDs to become broadly used on Arbitrum. Camelot will benefit from this proposal by building deep DEX liquidity for USDs and the SPA token. To achieve this, Camelot is committed to using GRAIL emissions to deepen Sperax liquidity, and therefore we will benefit from the additional SPA rewards. In addition, Camelot will be allocating a partner allocation that vests directly to the Sperax protocol.
This proposal will therefore cement Sperax as one of the main launch partners of Camelot, marking a significant milestone for our vision to support the ecosystem and become the native Arbitrum DEX.
Sperax will benefit from a more effective return on their emissions (through Nitro pool requirements). With the additional Camelot rewards, both USDs and SPA will see increased TVL and utility across the ecosystem. By being a launch partner, Sperax will additionally be able to have an advantageous position to create new USDs pairs, as many new Arbitrum protocols will be launching through Camelot. Camelot is committed to supporting the use of USDs within partner dapps and pools on our protocol.
Proposal Overview
Firstly, as a sign of commitment to establishing a long-term partnership, Camelot is allocating a portion of GRAIL that will directly vest to the Sperax protocol. Through this, both protocols will be in close alignment, and Sperax will have direct exposure to the broader success of Camelot.
Secondly, the proposal will be for initial SPA incentives for USDs/USDC and SPA/USDs pools. Camelot is committing to incentivizing these pools with GRAIL emissions, therefore asking Sperax to match these 1:1 in USD value equivalent.
- Match Camelot emissions for USDs/USDC and SPA/USDs genesis pools (live ten days before launch and used to bootstrap the initial liquidity)
- Match Camelot emissions for USDs/USDC and SPA/USDs for Nitro pools post-launch
In addition, we propose the integration of Camelot pools within Sperax’s Demeter app. This will allow significant utility for users to open up customizable pools for USDs with double rewards. Camelot is focused on bringing flexibility to protocols and is committed to supporting Sperax through emissions and development work.
Technical Specification
1. Partnership allocation
10% of the total GRAIL supply (in xGRAIL, vested over 2y with a 6-months cliff) will be allocated to partners who commit to migrating their liquidity and incentives to Camelot.
To lay the foundation for a solid and long-term collaboration, Camelot offers Sperax 2.5% of this allocation (e.g., 0.25% of total GRAIL supply). The conditions for this basis are Sperax being an active partner and committed to incentivizing liquidity on Camelot post-launch.
2. Genesis pools*
As part of the proposal, Camelot is committed to allocating xGRAIL rewards to USDs/USDC and SPA/USDs genesis pools to incentivize deeper liquidity and increased yields.
The total GRAIL genesis pools’ allocation for partners will be 5% of the total GRAIL suppl. We offer to allocate 3% of this pool to Sperax (0.2% of total supply), distributed over six months. This allocation will be split between the two USDs/USDC and SPA/USDs pairs, and could be increased over time if the pool is performing well.
In return for this allocation of GRAIL rewards, Sperax commits to incentivizing the genesis pools with $30k worth of SPA (using a 15-day rolling average) over six months.
Those SPA will be added directly into the Genesis pool as a double incentive and be distributed over six months like the Genesis pool’s base rewards.
*Genesis pools will start on November 22th. Users will have ten days (seven before the public sale and three during) to deposit Camelot LP tokens into the Nitro pools and earn a pro-rata amount based on the GRAIL supply allocated to each pool.
Depositors will linearly earn emissions in xGRAIL during the six months following the public sale. They can withdraw anytime, at which point their share of the emissions will redirect to the remaining LP tokens.
New Genesis Pool deposits will not be allowed, however, after the end of the public sale.
Since Camelot is not valued yet and the sale is based on a price discovery mechanism, we suggest using our average projected FDV of $20M as a reference. With a $20M FDV, the 3% would represent a value of $30k worth of xGRAIL incentives that would be, at minimum, matched with an equivalent SPA value. It’s important to note, xGRAIL does not have a price as it’s the locked version of GRAIL, and for the purposes of this equation, we are assuming a 1:1 ratio.
3. Native integration and support
Sperax will be listed on Camelot’s frontend and natively integrated for trade routing, allowing for broader utility and increased volume of the SPA and USDs tokens volume.
More generally, Camelot will collaborate in any possible way to effectively integrate USDs and SPA liquidity, including setting adapted customized fees on pairs if needed.
4. Yield farms
Once fully launched and in addition to the genesis pool rewards, Camelot is also committed to allocating ongoing liquidity mining incentives to USDs/USDC and SPA/USDs pools. These emissions will be periodically re-adjusted based on the TVL, fees generated, and the amount of SPA incentives committed to Nitro pools.
As a counterpart, Sperax will create USDs/USDC and SPA/USDs Nitro pools to add an additional layer of SPA incentives to the participants of those two farms.
To guarantee the fairness of the process, Sperax will rebalance its incentives to maintain them to a 1:1 ratio based on GRAIL and SPA dollar values. The specific amount and value will be confirmed later between both parties. Eventually, Sperax emissions will be determined by their gauge model.
5. Collaborative marketing
Sperax will engage in collaborative marketing efforts as a launch partner through AMAs, posts & retweets when the launch is announced and incentivize its users to deposit into its genesis pools.
Voting
For: Allow Sperax protocol to partner with Camelot and to spend SPA emissions on its genesis pools and farms. Requesting $30,000/15-day moving average which comes to 3.4 Mn SPA tokens.
Against: Sperax to not form a partnership with Camelot.
