10,000-word research report Camelot (GRAIL)

10,000-Word Research Report on Camelot (GRAIL) A Comprehensive Study

1 Introduction to Camelot

Camelot is a community-driven DEX on the Arbitrum chain with an ecosystem-focused approach. Camelot is built as an efficient and customizable protocol that allows builders and users to leverage Camelot’s infrastructure for deep, sustainable, and adaptive liquidity. Camelot goes beyond the traditional design of DEXs and prioritizes a customizable approach that emphasizes composability.

The goal of Camelot is to provide the Arbitrum ecosystem with rich innovative features that offer high flexibility and control over its own liquidity. It supports new protocols launched on Arbitrum, providing them with tools to bootstrap liquidity and sustain their growth while offering state-of-the-art functionalities that can easily integrate, build, and be utilized by other protocols in the ecosystem.

1.1 Features of Camelot

Dual AMM Algorithm

Camelot has two AMM algorithms:

For volatile trading pairs, such as Uniswap currently.
For stable trading pairs, such as Curve currently.

Traders are directed to the correct liquidity pool based on the assets, especially during automatic routing, designed for stablecoin swaps, allowing traders to save significant transaction fees. LPs can also choose which liquidity pool to deposit into.

Dynamic Setting of Transaction Fees

Camelot allows liquidity pool creators to set different transaction fees for buying or selling, each customizable. This way, project teams can incentivize certain trading directions according to their needs. For projects with high initial token selling pressure, they can choose higher selling fees as a mechanism for long-term holders. For example, for Camelot’s own platform token GRAIL, the fee ratio for buying with USDC is 0.3%, and for selling, it is 1%.

Alternatively, some project teams may want lower transaction costs and can set lower transaction fees.

Referral System

For partners and projects that want to be part of the Camelot ecosystem, each collaboration project can add links to Camelot’s trading pairs on their DApp or official website. As a result, they can receive a share of the transaction fees for each trade conducted on Camelot. This creates a win-win situation, benefiting all parties involved.

spNFT (Staked Position)

LP tokens staked by users are transformed into non-fungible spNFTs. Camelot innovatively uses spNFTs to improve upon the classic Farm/Earn methods and introduce more gameplay.

spNFT can be used as an encapsulation layer for LP, providing our locking mechanism for almost any liquidity or single asset. This means that any protocol can leverage this feature, whether they are listed on Camelot or not, and add locking to their liquidity, as well as their own incentive layer.

The biggest use of this design is to allow for more flexible mining reward mechanisms. It can lock LPs, and different lock-up periods can have different mining reward coefficients. It also encourages users to lock up for longer periods of time to earn more rewards and grow together with the project.

The scalable applications of spNFT go beyond this, for example, it can be used as collateral for lending and other activities.

Nitro Pools

Anyone can create a Nitro pool, which only accepts spNFT staking. Each Nitro Pool has the following settings:

A specific wrapped LP (or single asset). Only positions obtained from this asset defined by the deployer can be deposited into the pool.
A reward token (additional rewards can be added at any time)
Start time for deposits, during which no one can stake
A reward distribution phase duration (start and end time)
Optional harvest start time

Nitro can also set whitelists, authorizing only certain addresses to interact with its Nitro Pool. This mechanism has many uses: rewarding the most loyal users, winners of competitions, targeted compensation distributions, replacing airdrops, and more.

Projects can set incentive measures through the incentivized pool Nitro Pools, providing rich and powerful functions for the projects.

1.2 LaunchLianGuaid

Another feature of Camelot is LaunchLianGuaid, which has been done twice in history, once for its own project and once for NEU. According to official news, there are three projects that will soon be launched: OnchainTrade, Nitrocartel, FarctorDao.

Being a new dex without investment institutions, Camelot has gained support from numerous projects. There is a rumor in the community that Camelot is a native dex developed by a team closely related to Arbitrum. And from Camelot’s official introduction, it seems to hint at these pieces of information. For example, the official self-introduction is: a dex that supports the development of the Arbitrum ecosystem. Unlike other projects with grand ambitions, its self-description is a supporter of the ecosystem.

2 Camelot Status

2.1 Competitive Comparison

According to DefiLlama’s data, Camelot’s TVL ranks fifth on Arbitrum’s dex, with a TVL of 38.85m (on the official website, Camelot’s TVL is 40M, possibly due to different selected time). In terms of TVL, it is more than twice the difference compared to Uniswap and Sushi. However, starting from January 18th, Camelot’s TVL began to grow rapidly, from 18M to 40M. While Uniswap and Sushi’s TVL only grew by about 30% to 40%. Camelot’s growth rate is significantly much faster.

Further analyzing the trading volume: in terms of absolute quantity, Camelot has experienced a step-like growth. Prior to January 23rd, the daily trading volume was generally less than 1M, with a long-term daily trading volume of 300K to 500K. However, starting from January 26th, the daily trading volume became around 4M, instantly increasing by more than 4 times. In the following days after February 7th, the daily trading volume increased to 16M, another 4-fold increase. It reached a peak of 21M. How the daily trading volume will change afterwards requires further observation.

From a relative quantity perspective, there is still a certain gap compared to Uniswap and Sushiswap. Uniswap’s highest daily trading volume in the past month was 190M, which is 9 times higher than Camelot, and 3 times higher than Sushiswap. Of course, it is worth mentioning that Camelot’s daily trading volume has already surpassed Curve and Balancer.

2.2 Camelot Trading Pairs

In the top 10 ranking of TVL, the first-ranked is the USDC trading pair, followed by ETH. At first glance, the remaining projects, except for GMX, don’t seem to have much fame and don’t make it to the top 10 in DefiLlama’s TVL ranking.

However, let’s look at this problem from a different perspective. Most protocols are deployed on multiple chains, such as Uniswap, etc. In the TVL ranking, we selected the top 10 projects that are only on the Arbitrum chain or primarily based on Arbitrum’s TVL. This includes GMX, Zyberswap, Radiant, Camelot, Gains Network, Dopex, Vesta Finance, PlutusDAO, Jones DAO, and Hegic. Among them, 50% of the projects have trading pairs on Camelot, some even prefer it.

Although Camelot still has some differences in TVL and trading volume compared to Uniswap and Sushiswap, for the projects on Arbitrum, Camelot is very attractive, mainly because Camelot provides rich innovative features.

3 Economic Systems

3.1 xGRAIL

xGRAIL is illiquid and non-transferable, but can be allocated and managed through dedicated plugins.
xGRAIL can be obtained by pledging Grail or from spNFT earnings.
xGRAIL can be converted to Grail, but the conversion rate increases proportionally with the unlocking time.
For a minimum unlocking period of 15 days, the ratio is 1:0.5
For a maximum unlocking period of 6 months, the ratio is 1:1
xGRAIL is the governance token for Camelot, and the community can vote based on xGRAIL.
Unofficially, xGRAIL will receive airdrops from other projects.

Note: The unlocking time refers to when users submit a conversion request for xGRAIL on the official Dapp and choose how many days later they will receive the corresponding GRAIL. If they choose 15 days later, they will receive 50% of GRAIL.

3.2 Token Allocation

The maximum supply of GRAIL is 100,000 tokens

Genesis Distribution

15% for pre-allocated public sale (5% xGRAIL and 10% GRAIL)
10% for protocol-owned liquidity (7.5% for initial liquidity, minted in multisig)
5% linearly distributed to the Genesis Nitro pool over 6 months

Release Rules

22.5% for liquidity mining over the next 3 years
20% for core contributors, linearly unlocked over 3 years
10% for partners (locked for 6 months, then unlocked over 2 years)
8% reserve (minted in multisig)
5% for the ecosystem
2.5% for development fund, linearly unlocked over 3 years
2% for advisors, linearly unlocked over 3 years

The supply of GRAIL (blue) and xGRAIL (green) will be released over a period of 3 years. The initial unlocking percentages for GRAIL and xGRAIL are 31% and 5% respectively.

Except for the reserve and development fund, all unlockings are generated through a combination of GRAIL and xGRAIL. The special feature of this approach is the inherent lock-up function. Because the exchange ratio between xGRAIL and GRAIL changes over time, with 1:1 only after 6 months and a minimum of 50% after 15 days. It means that the grail produced by liquidity mining also has a lock-up feature.

Camelot will release about 15% of liquidity incentives in GRAIL and 85% in xGRAIL. Compared to xGRAIL, native mining pools and higher-risk pools typically receive a higher proportion of GRAIL.

3.3 Protocol Income Distribution

60% to LP token liquidity providers
22.5% of dividends redistributed to xGRAIL holders
12.5% used for GRAIL repurchase and burn
5% to the core contributors fund

3.4 Grail Burning Mechanism

There are two main parts to GRAIL burning:

1) 12.5% of protocol income used for GRAIL repurchase and burn

2) In the xGRAIL to GRAIL exchange, any remaining GRAIL that is not enough for a 1:1 exchange will be burned.

3) When a plugin is uninstalled (e.g., revoking a reward pool), 0.5% of xGRAIL will be collected as a tax, and the proportionate amount of GRAIL will be burned.

According to official data, a total of 666.43 GRAIL has been burned. Most of them were burned during exchanges.

4 On-Chain Data Analysis

4.1 Holding Addresses

https://arbiscan.io/token/0x3d9907f9a368ad0a51be60f7da3b97cf940982d8#balances

According to on-chain data, a total of 73,561.1 GRAIL has been generated.

TGE time: December 6th, 2022

Ranking address 1: Team allocation

Ranking address 2: Tokens for XGRAIL, holding a total of 16,875.9 GRAIL

Ranking address 3: Partner allocation. Initially allocated 10,000 tokens, currently locked.

Ranking address 4: Reserve. Initially allocated 8,000 tokens, transferred to GRAIL distribution wallet 20, untouched.

Ranking address 5: GTAIL-USDC trading pair

Ranking address 6: Development fund. Initially allocated 2,500 tokens, untouched.

Ranking address 7: Tokens for liquidity. Initially allocated 10,000 tokens, 7,500 used for LP.

Ranking address 8: Advisors. Initially allocated 2,000 tokens, being unlocked.

Ranking address 9: Burn address

Ranking address 10: Protocol income

Ranking address 11: Whale, bought 381 GRAIL for $236,000 in the last 6 days, cost $620. Previously had frequent interactions.

Ranking address 12: Exchange wallet, possibly from bitget.

Ranking address 13: Whale, only one transaction, cost $244.

Ranking address 14: Whale, currently holding recent purchases at a cost of 1208

Ranking address 15: Whale, recent purchases at a cost of 1014

Ranking address 16: Whale, estimated cost around 250, already sold 180

Ranking address 17: Whale, multiple batch purchases, cost around 450~500, already sold around 35

4.2 Genesis Generation

We found the Genesis allocation address and according to the query, Genesis has generated 72,500 GTAIL. Comparing it to the distribution ratio mentioned in the whitepaper, we can draw the following conclusions:

Initially, 220,000 were generated with 20,000 allocated to the team and 2,000 to advisors
5% generated, pledged as xGRAIL, linearly distributed to the Genesis Nitro pool within 6 months
Initial 22.5% not generated for 3-year liquidity mining. Genesis has generated 72,500, and the current supply is 73,500, indicating new GRAIL is being generated daily.

4.3 Team Unlocking Research

The top-ranking address is allocated 20% to the team, which is 20,000 GRAIL. According to investigation, this wallet is scheduled to unlock tomorrow. There might be significant selling pressure in the market, so we conducted in-depth research on this wallet.

1) Initially allocated 20,000, currently at 18,862, with 62 days remaining for unlocking, averaging 18.35 GRAILs unlocked per day. According to the investigation, the daily unlocked GRAILs are not fixed.

2) Every day at a fixed time, transfers are made to some personal wallets, with the wallets being mostly the same each time. However, wallets with longer intervals may have differences. It could be due to changes in team members or wallet addresses being changed by members.

3) The unlocking is divided into GRAI and XGRAIL parts.

4) We have closely tracked the wallets being unlocked and found a total of 5 wallet addresses accumulating more than 100 GRAILs, with the following operations:

Two individuals converted half of their GRAILs into XGRAILs, one person converted all into XGRAILs, one person added 75% to liquidity for mining, and one person did not make any active operations.

There are also two individuals who have accumulated 70~80 GRAILs but have not made any operations, according to investigations.

Although different addresses have different operations, a common point is that they have not sold a single GRAIL.

Below are the wallet addresses:

0x01e5d631ba707a029c8a1555bdac4805d7853e21

0x0e9e8fd17b0d4ecc931c1380f7231be76f80ae4b

0x2817d13ed8ed176cd99684c8bd5bdb0145667228

0xd8dc994fe2b075c697e5051c89b713bf15fa9294

0xe57a86c232b4db760caff9d5fcc3ce893034ca67

0x5e29fc164189ae03f7f05ab4a6e14620df60501c

0x77d2fb2fa0748eccb41d48e70001dc5aaaa7670c

4.4 Advisor Unlock Research

The initial allocation of advisors is 2000, and there are currently 1882 remaining. The unlocking progress is synchronized with the team, with an average of around 1.8 unlocks. According to on-chain queries, all unlocked tokens are directly converted to XGRAIL, so it can be said that there is no actual unlocking. One possibility is that the team currently does not have advisors.

4.5 Liquidity Mining Research

1) A total of 22,500 tokens are allocated for liquidity mining, which has not been generated in the initial allocation. However, 72,500 tokens were generated in the genesis, and the current supply is 73,500, indicating that new GRAIL is being generated every day. Specifically, in 66 days, a total of 1061 new GRAIL tokens were generated, averaging 16.07 tokens per day.

2) The generation of new GRAIL tokens is constantly occurring due to different user actions.

3) The daily generation of GRAIL tokens can vary, with differences of up to 50%.

4) Some of the generated GRAIL tokens are xGRAIL.

4.6 Actual Circulating Supply

There are currently 73,561 GRAIL tokens, but the following portions are not circulating or are linearly unlocked:

Team share: 18,862
xGRAIL: 16,875
Partners: 10,000
Reserve: 7,980
Development fund: 2,503
Tokens for liquidity: 2,500
Advisors: 2,000
Burn: 680
Protocol income: 398

The total of the above is 61,798 tokens. Therefore, the actual circulating supply is 11,763 tokens, and based on the price of $2,000 per GRAIL token, the circulating market cap is $23 million.

In addition, there are some tokens that are likely not to be sold, including the 1,882 tokens unlocked by the team and the 3,376 tokens in the LP. If we subtract these two parts, the actual circulating supply is only 6,505 tokens.

4.7 Unlock Analysis (including xGRAIL)

The daily increase in circulating GRAIL tokens comes from the following four parts:

Team unlock
Advisor unlock
Liquidity mining output
xGRAIL unlock

In the previous analysis, we know that the GRAIL tokens unlocked by the team have never been sold, and the advisors have not been directly converted to xGRAIL yet. Therefore, the average daily output from liquidity mining is 16 tokens, with a certain proportion of xGRAIL. According to official information, the proportion is 15% GRAIL and 85% xGRAIL. However, the proportions may vary in different pools. So even with a larger estimate, let’s assume that 50% is GRAIL. In that case, the actual daily output is 8 tokens.

xGRAIL unlocking is a bit complicated because it involves not only users voluntarily converting GRAIL to xGRAIL but also daily unlocking and mining on the farm, which produce a certain proportion of xGRAIL. Additionally, the duration of xGRAIL can be selected. After reviewing multiple data sources, we believe that the following two pieces of data can provide some project information.

The first image is the daily redemption application form, and the second image is the future daily unlocking quantity of GRAIL (although users may cancel later).

From Figure 1, we can see that around February 8, there was a peak in redemption applications, which was due to continuous surges in the GRAIL price. Among the peak days, 15 days and 180 days correspond to 267 and 381 coins, respectively. We don’t need to consider the 180-day period, as there are still many days left. However, in 15 days, there will be another peak on the 23rd. Since only 50% of GRAIL can be obtained in 15 days, it can be imagined that these chips should have a particularly low price. Moreover, they may consider the current price already being very high and reaching its peak in the next 15 days. Without much thought, these redeemed coins will definitely be sold immediately.

From the second image, we can see that starting from February 21, there will be a small peak in GRAIL unlocked by xGRAIL. Approximately 320 GRAIL coins will be unlocked from the 21st to the 26th, with the peak on February 23. If calculated based on a price of 2000 USD per GRAIL, the total value would be 640,000 USD.

5 Conclusion

1 Camelot is a native DEX on Arbitrum with many innovative features that are highly beneficial to ecosystem development. Currently, Camelot has a certain gap with Uniswap in terms of TVL and daily trading volume, but its growth rate is much faster. Moreover, Camelot is favored by the native projects on Arbitrum. With the issuance of Arbitrum and the flourishing development of the ecosystem, Camelot has the possibility to maintain rapid growth and potentially surpass Uniswap.

2 Camelot also has the LaunchLianGuaid feature, which may have potential for tokenization, but specific rules have not been disclosed.

3 The actual circulation is 11,763 coins, with the circulating market value calculated at 23 million USD based on the GRAIL unit price of 2000 USD. If we exclude 1882 coins that are locked and not for sale by the team, as well as the 3376 coins in the trading pool, the actual circulation is only 6505 coins, with a market value of 13 million USD.

4 The team has already unlocked 18.82 million coins, but according to in-depth investigations, they have not sold a single GRAIL, which represents the team’s positive outlook for the future. Moreover, the team has converted most of the GRAIL into xGRAIL or provided liquidity to the pool.

5 GRAIL’s daily production is estimated to be around 8 coins, but xGRAIL redemption will experience a small peak on February 21. It is expected that the total redemption quantity from the 21st to the 26th will reach 320 coins.

6 GRAIL tokens have already experienced significant price increases, so please be mindful of the risks.

7 This article is only for the research of the project and the research of the data, and does not constitute any investment advice.

We will continue to update Blocking; if you have any questions or suggestions, please contact us!

camelot

Was this article helpful?

93 out of 132 found this helpful