Bond Protocol is the next evolution of bonds-as-a-service, providing protocols with a permissionless solution to treasury dilution & token issuance. Bond Protocol was borne out of Olympus DAO and has since branched off to be laser-focused on supporting other protocols with capital raise needs.
As the native Arbitrum DEX, Camelot is committed to supporting native builders with bespoke support and custom-built infrastructure. Bonds provide protocols with an additional tool to build protocol-owned liquidity, diversify treasuries, accumulate strategic assets, and extend development funding. Welcoming Bond Protocol to the Round Table is a natural extension of our goal to foster an ecosystem of collaboration on Arbitrum.
In addition to our joint commitment to supporting native builders, Camelot will leverage bonds for our treasury and development runway.
A partnership to support sustainable liquidity on Arbitrum
Camelot is a custom-built protocol that aims to become the native Arbitrum DEX. By building multiple novel features from the ground up, Camelot enables higher capital efficiency and attempts to bring the real-yield approach to a DEX.
Through our infrastructure, we aim to build long-term and sustainable liquidity, allowing protocols to manage their incentives and emissions more efficiently. Protocol-owned liquidity plays an important role in managing liquidity on DEXs, and therefore Bond Protocol provides a highly valuable service that will benefit all Arbitrum builders. By extension, this will lead to mutually beneficial gains for Camelot too.
In addition to deepening token liquidity, most protocols are over-exposed to their native governance token, with most treasuries having <10% diversification into protocol-owned liquidity or stablecoins. Issuing bonds secures funds for development and investment in strategic initiatives to increase protocol viability and longevity .
Not only does this partnership achieve deeper liquidity for protocols on Camelot, but, most importantly, it supports the long-term and sustainable development of protocols on Arbitrum. We’re therefore proud to welcome Bond Protocol to the Round Table.
The Round Table comprises the key Arbitrum builders, and we are excited that this partnership will further align the ecosystem with collaborating, innovating, and building.
Bond Protocol was borne out of OIP-104 on July 15th, 2022, following the success of Olympus Pro (OP), enabling it to establish a standalone entity.
Bond Protocol is building a permissionless system that enables the creation of Olympus-style bond markets for any ERC-20 token or LP token pair. The main features are:
- Permissionless: Anyone can create a bond market to sell Payout Tokens for Quote Tokens
- Composable: Bond purchasers receive Bond Tokens (tokenized bonds) that represent their positions which allow for the creation of secondary markets
- Modular: Unified contract architecture enables easy creation of new bond assets and auction interfaces to be plugged into the system
Bonding is a mechanism in which a User can sell an asset (i.e., Quote Token) in the bond market (for an existing Quote & Base pair created by an Issuer) to a protocol in exchange for discounted Payout Token claimable at a future date.
Bonds are offered at a discounted rate to incentivize users to sell to the protocol rather than the open market. They also have a configurable vesting period to prevent users from selling all the discounted tokens at once for a quick profit.
A continuous Dutch auction is used to price the bonds and is dynamic, determined by the supply and demand of bonds. It trends higher when there is more demand and vice-versa i.e., lower in the absence of demand. This mechanism provides a real-time true reflection of the bond price in the market.
Custom-built Liquidity Infrastructure
Camelot’s vision is to build innovative infrastructure that supports other Arbitrum builders through unique custom features:
- Unique AMM implementation that supports volatile & stable assets with dynamic fees (custom fees per pool, as well as per buy or sell direction)
- A custom NFT wrapper for staked positions that allows LPs to be reused for further capital efficiency gains
- Nitro pools allow protocols to incentivize liquidity based on custom requirements permissionlessly
- Innovative escrowed tokenomics that enable a more sustainable protocol that can capture real yield for holders
Camelot will leverage all its unique features to ensure that liquidity is deep and adaptable — tailored to what is most effective for our partner’s token. For example, Nitro pools would allow us to incentivize liquidity in a custom way, such as by only rewarding LPs that lock for a certain time and deposit over a certain amount.
In addition, we could set custom fees for partner pools or add even further custom requirements to Nitro pools. This high level of control will allow us to support our partners so they can build an efficient rewards structure for their token liquidity. Therefore, we can enable highly efficient returns on their liquidity, while bootstrapping critical infrastructure that benefits the entire ecosystem.
Most importantly, by welcoming our partners to the Round Table and building deep liquidity for their tokens, we hope to foster further innovation within the Arbitrum ecosystem. For example, deeper liquidity could open up new opportunities for use in other DeFi primitives such as perpetuals of options.
The quest for GRAIL
After launching two months ago, we’re proud to have set the initial foundations for Camelot to become the Arbitrum native DEX.
Before launching, we announced the formation of the Round Table with our Genesis partners: GMX, Umami, Jones, Buffer, GMD, Sperax, and Nitro Cartel. With our partner’s support, our genesis pools allowed us to bootstrap $15m TVL before even having a token live!
Following our initial partners and genesis pools, we proceeded with the fair launch of our $GRAIL token. We’re proud to have had a smooth sale, raising over $3.8m with a final valuation of $25m FDV! No VC, no presale, $GRAIL was an utterly fair opportunity for the community to purchase.
From the beginning, Camelot is designed as a custom-built protocol that prioritizes sustainable tokenomics and long-term behaviour. We’re proud that our Genesis farms & fair launch sale demonstrated these commitments to the community.
Now that the foundation has been set, we’re excited to move forward at full speed. We just concluded the first community public sale from Neutra Finance, and in the coming weeks, we will see exclusive launches from Vela, Factor, and many more.
We’re excited to be the home for Arbitrum native builders, and we look forward to what we can achieve as an ecosystem that works and builders together.