Resolving Liquidity #12: Camelot

Resolving Liquidity #12: Camelot

A DeFi renaissance is unfolding with our newest partner, Camelot!

As Arbitrum's native DEX, Camelot hosts over $50 million in TVL and has become the go-to choice for many DeFi users due to its unique product offerings.

We're excited to usher in a new wave of liquidity into the largest Layer 2 ecosystem. The issue of blockchains often being unable to scale due to liquidity constraints is now being addressed by Entangle's infrastructure. Here's how.

Entangle Partners With Camelot

Camelot serves as both a Decentralized Exchange (DEX) and a Launchpad on the Arbitrum network, aiming to offer a range of flexible and customizable liquidity solutions. Its core functionality allows users and developers to adapt various strategies for trading and liquidity provision, responding to the specific needs of the Arbitrum ecosystem.

The platform offers two versions of Automated Market Makers (AMMs), V2 and V3, each with specific features to enhance user experience and financial outcomes. The V2 and V3 AMMs are built on the Algebra's v1.9 codebase, which is known for its efficiency and user-centric design. They also introduce dynamic directional fees, allowing for customized fee structures depending on trading behaviours.

One of Camelot's unique features is its approach to yield generation through non-fungible staked positions. Unlike traditional liquidity pools where you receive fungible liquidity provider (LP) tokens, here you get non-fungible tokens that can be associated with different yield-boosting features. This layer adds new opportunities for earning and makes capital use more efficient for liquidity providers.

Another key attribute of Camelot is its permissionless nature, particularly evident in its Nitro Pools. These pools allow any project to create and control their own liquidity pools and incentives, providing a higher degree of freedom and adaptability for different DeFi strategies.

From a sustainability standpoint, Camelot employs a dual-token system consisting of GRAIL and xGRAIL tokens. The controlled emission of these tokens aims to balance short-term incentives for users with the long-term financial health of the platform. Part of the earnings generated from trading fees and other activities on the platform is redistributed to xGRAIL holders, while other portions are used for buy-back and burn mechanisms to support the value of the GRAIL token.

By incorporating Entangle into Camelot's unique infrastructure, we significantly enhance the utility and efficiency of Liquidity Provider (LP) Tokens which are reflected as spNFTs via our innovative Liquid Vaults. Much like Camelot's dual-token mechanism, these Liquid Vaults offer a dual-layered system that serves to solidify liquidity by introducing additional use-cases for LP Tokens. This not only anchors the liquidity in the protocol but also amplifies its utility.

Moreover, the Liquid Vaults come with the added advantage of yield enhancement. Users gain access to elevated yield opportunities thanks to the 'unlocking' feature provided by the Liquid Vaults. This multi-faceted approach ensures that liquidity is not just maintained but also optimised, creating a win-win scenario for both the protocol and its users.

Here’s a user journey demonstrating how we’re enabling greater flexibility for Camelot LP assets :

  1. User provides liquidity to a V2 position on CamelotDEX, for example ETH/Pendle and obtains an spNFT in return which acts as an LP Token
  2. User stakes the spNFT via Entangle
  3. Entangle stakes & auto-compounds the spNFT on a Nitro Pool on CamelotDEX
  4. User is given an LSD in return called a “Liquid Vault” as a receipt

4. The user can collateralize the Liquid Vault for

  1. further Lending & Borrowing on partner protocols
  2. Liquidity provisioning on derivatives protocols!

Liquidity Rich Future

Entangle is laser-focused on bridging fragmented liquidity across multiple ecosystems. By joining forces with Camelot, Arbitrum's native DEX, we're amplifying liquidity pools, synergizing assets, and essentially fueling a new era of liquidity abundance.

This partnership isn't just symbiotic; it's a leap toward redefining DeFi's potential. Camelot gains a substantial liquidity boost and an expanded asset suite, while we extend our footprint in a thriving L2 ecosystem. Together, we're not just surviving; we're setting new benchmarks in the DeFi ecosystem.

About Camelot

Camelot is an ecosystem-focused, community-driven DEX and Launchpad built on Arbitrum.

About Entangle

Liquidity Resolved.

The interoperable layer that enables web3 DApps and protocols to scale with omnichain liquidity.