🎁┃Incentive system

Camelot’s in-house incentive system, offering a robust, efficient, and user-friendly way to distribute rewards to liquidity providers. Built entirely by Camelot, this system integrates on-chain and off-chain components to provide flexibility for protocols and users to create custom campaigns tailored to their specific needs

Key Features

• Unified Incentive Distribution

  • Supports v2 and v3 (with plans to support v4/Integral in the future)

• Permissionless

  • Any protocol can leverage the system, and it supports all tokens, including GRAIL and xGRAIL

• Highly Customizable Campaigns

  • Features include Blacklist/Whitelist modes, token weight adjustments, depth-based incentives, and the flexibility to evolve over time

• Deep Partners Integration

  • Seamlessly functions with Advanced Liquidity Managers (ALMs) and is compatible with any protocol providing liquidity to Camelot, ensuring the best possible user experience for their users

• Streamlines reward collection

  • Unifies the harvesting of all incentives and emissions into one simple step

  

How the System Works

The system is designed to handle reward distribution efficiently while allowing protocols to customize their campaigns

For instructions on setting up a campaign, refer to the campaign creation guide

Summary Explanation

• Campaigns are created and funds are fully managed on-chain

• An off-chain script computes rewards for LPs

  • The script operates in 4-hour epochs, calculating rewards based on criteria specified during campaign creation

  • After each epoch, it generates a new Merkle root and corresponding proofs, which are uploaded on-chain

• Users can:

  • Retrieve their Merkle proofs for eligible positions via our API

  • Claim pending rewards from the distributor contract at any time

Rewards Eligibility and Distribution

Users simply need to provide liquidity to be eligible for rewards - no further action is required

• V2 Pools

  • Rewards are distributed proportionally to liquidity ownership

• V3 Pools

  • Rewards are distributed based on the exact amount of fees generated during an epoch

  • Unlike similar solutions, Camelot computes the precise fees generated for every position in every epoch, ensuring:

    • Extreme accuracy in reward calculations

    • Prevention of cheating or gaming the system

Example: A user provides liquidity to the ETH/USDC pool

• V2 Pools: The user owns 1% of the pool’s liquidity and receives 1% of the rewards.

• V3 Pools: The user generates 2% of the fees and earns 2% of the rewards

Campaigns Customization

• Blacklist/Whitelist Modes

  • (V2 and V3) Use a blacklist to exclude specific addresses or a whitelist to include only specific addresses

• Token Weighting

  • (V3 only) Assign weights to specific tokens, allowing rewards to depend not just on fees generated but also on the token composition of the position - this helps incentivize positions that hold more of one token over the other

• Depth Criteria (WIP)

  • (V3 only) Incentivize or exclude positions based on price ranges

  • Use minimum or maximum liquidity depth to target specific ranges

A campaign for the BOOP/USDC pool with weights: Fees = 70%, TokenA (BOOP) = 20%, and TokenB (USDC) = 10%, allowing rewards to depend not just on fees but also on token holdings, incentivizing positions with more BOOP

Campaign Fees and Requirements

• Tokens must be whitelisted to be used in campaigns

• Campaigns must run for at least 24 hours

• Campaigns must distribute at least ~$50/day to be considered valid

• A 1% fee is deducted from the rewards to cover infrastructure costs

A protocol creates a campaign to incentivize the GRAIL/ETH pool. They choose already whitelisted USDC as the reward token. The campaign is set to run for 7 days, distributing $500 total, meeting the ~$50/day requirement. A 1% fee is deducted, leaving $495 to be distributed among liquidity providers

Partners and Integrations

• Advanced Liquidity Managers

  • Users providing liquidity to Camelot through integrated ALMs will receive rewards transparently and directly

  • Currently Integrated ALMs:

    • Gamma

    • Jones

    • Beefy (WIP)

    • Steer (WIP)

Example: A user provides liquidity to Camelot through Gamma (an integrated ALM). The system automatically tracks their position, and rewards are distributed directly to their wallet without the need for a manual claim

spNFTs Migration

• Users holding liquidity in spNFTs will continue receiving rewards during the first month to ensure a smooth transition

• spNFT rewards will stop on January 1st

• Rewards won’t apply if the spNFT is part of a Nitro Pool

We strongly encourage migrating liquidity from spNFTs before the deadline