Liquity is a decentralized borrowing protocol built on Ethereum, home to the immutable stablecoin $LUSD. With over $400m TVL, Liquity provides the DeFi space with a robust and capital-efficient stablecoin alternative. While the Liquity protocol is mainnet only, the LUSD stablecoin was launched on Optimism earlier this year and is now coming to Arbitrum: we’re thrilled to welcome Liquity at the Round Table to support LUSD’s Arbitrum expansion.
A key initiative to support innovation 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.
Liquity is a protocol that offers a censorship-resistant and decentralized stablecoin to power the DeFi ecosystem. Liquity will help Camelot to bring $LUSD to Arbitrum and is committed to making this relationship mutually beneficial.
With over $412m TVL and $180m LUSD in circulation, Liquity has continued to prove the utility of its interest-free borrowing model, as well as its novel bonding mechanisms through Chicken Bonds. After already expanding to Optimism, it’s a natural move to progress towards Arbitrum, and we are privileged to welcome the protocol into the ecosystem.
The Round Table is composed of the key Arbitrum builders, and we are excited that this collaboration will further align the ecosystem to innovate and build together.
Camelot as the gateway for exciting new builders on Arbitrum
Liquity is a decentralized borrowing protocol that allows users to draw interest-free loans against Ether used as collateral. Loans are paid out in LUSD (a USD pegged stablecoin) and need to maintain a minimum collateral ratio of 110%.
In addition to the collateral, the loans are secured by a liquidity backstop, the Stability Pool, containing LUSD and by fellow borrowers collectively acting as guarantors of last resort. Liquity as a protocol is non-custodial, immutable, and governance-free.
While stablecoins are the preferred reserve of value in DeFi, most of the demand is currently addressed by centralized options requiring trust, such as USDC or USDT. Liquity provides a fully decentralized and censorship-resistant alternative which also focuses on capital efficiency and user-friendliness.
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 permissionlessly incentivize liquidity based on custom requirements
- Innovative escrowed tokenomics that enable a more sustainable protocol that can capture real yield for holders
- A completely open, decentralized, and neutral community to support and connect the ecosystem of builders on Arbitrum,
Camelot will leverage all its unique features to ensure that liquidity is deep and adaptable — tailored to what works best for the LUSD 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 can set custom fees for $LUSD, or add even further custom requirements to Nitro pools. This high level of control will enable an efficient rewards structure for the LUSD token liquidity. This will enable users and protocols to bootstrap LUSD/ETH liquidity, a critical infrastructure for further use cases to develop on top of LUSD on Arbitrum.
With this collaboration we aim to make it more attractive for builders and other protocols to use LUSD on Arbitrum.
Next Steps for LUSD on Arbitrum
Users are now able to bridge their $LUSD through the official Arbitrum bridge and Stargate. The Liquity farms are now open for deposits on Camelot, and in the following 24 hours rewards will begin to be distributed.
Just to recap, that means at 6pm UTC today the farms will open for deposits, with the rewards starting at 6pm UTC on the 20th Dec.
The quest for GRAIL
Camelot has been live for less than 3 weeks and has now achieved over $15m TVL. Our genesis pools were the first to launch and allowed us to build deep and sticky liquidity before token emissions were even live. Following that, our public sale ended after raising $3.8m! These funds are being split 50% to PoL, 30% to xGRAIL dividends, and 20% to fund the team.
The GRAIL token successfully launched 2 weeks ago, and we’re proud that the deployment went smoothly and that our $4m of PoL managed to absorb the initial volatility. Our emissions and dividends are now live too, and therefore the Camelot protocol is officially launched.
Camelot’s core goal is to support the Arbitrum ecosystem by providing custom-built infrastructure to builders, and sustainable real yield to users. By forming the Round Table, we aim to create an environment where protocols build and collaborate together, powering further innovation on Arbitrum.