Bringing the successful CamelotDEX model design to Metis
Metis is entering a new era of innovation, and its community needs a feature-rich DEX that can rise to meet user goals in the ever-evolving DeFi space. That’s why we’re excited to bring the CamelotDEX model design to supercharge Metis’ ecosystem growth. We call the Camelot model on Metis: Hercules.
Hercules employs a hyper-effective liquidity model that maximizes the liquidity efficiency of an entire ecosystem by providing deep, long-lasting protocol-owned liquidity to Metis’ based projects. This model achieves this by leveraging the use of numerous advanced liquidity strategies with an innovative reward structure and dual-token utility design to effectively incentivize users with attractive yields for the use of their liquidity.
By migrating Camelot’s tech stack from the ground up from Arbitrum to other L2s like Metis means that builders and users benefit from economies of scale through a battle-tested and audited codebase, uplifting DeFi on Metis.
A Successful DEX Design
The reward structure through Nitro Pools, staked position NFT (spNFT) coupled with the xToken model design is a groundbreaking innovation in the DEX world. Since the introduction of this novel design by Camelot team, their DEX has experienced sticky liquidity despite market downturns.
The incentivized approach with GRAIL & xGRAIL has helped several protocols like JonesDAO and PlutusDAO to cut emissions by more than 70% while at the same time avoiding the common pitfalls of being a “yield-farm for mercenary capital.” Protocol Owned-Liquidity (POL) has greatly benefited from the farm incentive model to gain ownership stake through the farmed xGRAIL; this in turn enabled boosted pool APR as well as dividends from platform fees.
In short, Camelot’s DEX design is built to grow ecosystems, as projects benefit from a new way to fund their treasuries and build new flywheels. As a result, Camelot’s DEX model design has built sticky liquidity of more than $50M — even accounting for the recent liquidity crunch caused by the bear market.
Early users significantly benefited from the explosive growth of the GRAIL token, which surged 20x within the first four months after launch. On top of that, xGRAIL holders boosted their farm yield and also got dividends directly from DEX fees in the form of USDC and ETH — Real Yield!
The dual-token model, coupled with several burn mechanisms, have led to more than 3000 GRAIL being burned, which is 3.1% of the GRAIL supply (at current price, that’s around $2.25 million).
The composability use-cases become evident when you see the number of projects being built on top of the Camelot DEX.
- @DefiEdge & @GammaStrategies integrated directly on the DEX, increasing concentrated liquidity adoption.
- @OrangeFinance & @Neutrafinance provided a Delta-Neutral Vault for stablecoin lovers by auto-compounding farming rewards and rebalancing using @Aave.
- @harvest_finance & @single_finance built strategies to maximize yield by leveraging the Yield Booster plugin.
- @Rodeo_Finance innovated with leverage farming for Camelot’s liquidity providers on the most traded pairs.
- @pendle_fi released 三 pools to allow users to leverage their LP yield on the Pendle platform, boosting Camelot liquidity.
- Not to mention the number of protocols prepping for the GRAIL wars by accumulating xGRAIL (@magpie, @JonesDAO, @PlutusDAO_io, @ConcentricFi) that will allow them to direct liquidity to their favorite pairs.
The Arbitrum community recognized the importance of Camelot with the recent Arbitrum DAO grant. The grant proposal received the highest number of FOR votes, totaling more than 201 million ARB.
Hercules: The CamelotDEX of Metis
The Camelot team is committed to the Arbitrum network. At the same time, Camelot’s toolset is built to optimize growth on other networks, for the greater good of the DeFi space on other L2s.
“The code of Camelot is custom and more complex than common DEXs, so when the Hercules team reached out for support, we wanted to ensure that a friendly fork of Camelot is executed in a way that prioritizes safety and stability for the Metis ecosystem.” said Camelot wizard lead Myrddin.
We’re proud to highlight the features that make Hercules a next-generation DEX for real yield and customizable liquidity infrastructure, built to turbo-charge the Metis ecosystem:
- Dynamic AMM (dAMM) to support volatile pairs based on the UniV2 model, while at the same time supporting correlated assets such as stable pairs.
- Directional swap fees depending on the direction (buying/selling) to best suit protocols seeking sticky liquidity.
- Concentrated liquidity (clAMM) complexity abstraction for greater adoption through simplified integration directly on the DEX.
- Liquidity position NFTs (spNFTs) offer an extra layer of composability for greater capital efficiency.
- Customized launchpad for several token launch strategies: fair-launch, referrals, discounts, airdrop, hard-cap, whitelist, etc.
- Swap referral, a whitelisted referral system to share swap fees with partners and integrators.
- Dual-token design enables sustainable tokenomics while providing real yield to users.
- Deflationary mechanisms are natively built-in for long-term growth and the sustainability of the DEX.
A huge boon for the Metis DeFi ecosystem will be Hercules’ dual-liquidity model for asset pairs, enabling both volatile and stable assets to be traded optimally. Unique dynamic directional swap fees are based on market conditions and swap direction. This approach allows projects to incentivize pairs differently, based on correlation, protocol structure, and market volatility.
Another unique innovation are spNFTs. spNFTs are non-fungible staked positions that are used to revolutionize liquidity. These tokens offer yield-bearing properties to lock in deep liquidity and promote easy management for liquidity providers. Overall, spNFT addresses the challenge of balancing rewards for different types of liquidity providers, rewarding long-term commitment, and ensuring capital efficiency.
The Arbitrum community has recognized Camelot as a major DeFi growth engine, and a central hub of activity as new projects and users enter the ecosystem. We at Hercules are thrilled to leverage the Camelot tech stack and DEX model design to become Metis’ champion DEX.
About CamelotDEX
Camelot is a custom-built protocol on the Arbitrum network. By building multiple novel features from the ground up, Camelot enabled higher capital efficiency and introduced the real-yield approach to a DEX.
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About HerculesDEX
Modeled after the highly successful CamelotDEX project, Hercules is a community-first, capital-efficient and flexible DEX developed with multiple tools to support the next generation of builders who look for sustainable liquidity in the Metis network.
