Lyra is a leading protocol for options trading, allowing users to buy and sell options that are priced with the first market-based, skew-adjusted pricing model. Lyra recently expanded to Arbitrum through integration with GMX, and we are excited to announce that Camelot will now be the home for $LYRA liquidity.
By welcoming Lyra to the Round Table, Camelot is committed to supporting deep and sustainable liquidity for $LYRA on Arbitrum. After a successful governance proposal, the Lyra DAO voted to seed the initial $LYRA liquidity on Camelot and match incentives through our Nitro pool structure.
The first and only LYRA liquidity on Arbitrum will be seeded at 9pm UTC Wednesday, 8th Feb, with $GRAIL and $LYRA rewards going live shortly afterwards.
A partnership 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.
Camelot is designed to move away from the standard short-term yield farm model to prioritize long-term and sticky liquidity. Therefore, we’re excited to build deep and sustainable liquidity for Lyra through our custom features, such as Nitro pools, dynamic fees, and spNFTS. Through this partnership, Lyra will be seeding the initial pool with $100k of protocol-owned liquidity, with $GRAIL incentives being matched with $LYRA rewards additionally. This means that users will be able to earn sustainable dual liquidity mining rewards on their LYRA/ETH positions. Several of our existing Round Table partners are already building with Lyra, and we’re therefore excited to support further collaboration on Arbitrum.
Lyra is one of the key plays in the DeFi options space, and we’re excited to see the utility and value they bring to the ecosystem. It is a privilege to support them on Arbitrum by welcoming them to the Round Table, and we’re committed to a long-term relationship that provides them with a bespoke service.
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.
Lyra is an options automated market maker (AMM) that allows traders to buy and sell options on cryptocurrencies against a pool of liquidity. The Lyra protocol has two key user groups, liquidity providers and options traders:
Liquidity providers (LPs) deposit sUSD (a stablecoin) or USDC into one of the asset-specific Lyra Market Maker Vaults (MMVs). This liquidity is used to make two-sided (buy and sell) option markets for the asset that the vault specifies (e.g., ETH Market Maker Vault LPs quote options on ETH). LPs deposit liquidity to the vault to earn the fees paid when options are traded.
Traders use Lyra to trade options. They can either buy options from or sell options to the MMV. Traders pay fees (in the form of the bid-ask spread) to LPs as compensation for their liquidity.
After being one of the main DeFi protocols on Optimism, Lyra recently expanded to Arbitrum, where they’ve seen a strong reaction from the community. With over $12m in TVL after a couple of weeks of being live Lyra is already bringing strong utility to the entire ecosystem, with several other protocols working on integrations and synergies with Lyra options.
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 $LYRA liquidity. For example, Nitro pools will allow Lyra 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 Lyra pools or add even further custom requirements to Nitro pools. This high level of control will allow us to support the Lyra DAO in building an efficient rewards structure for their token liquidity. Therefore, we can enable highly efficient returns on Lyra liquidity while bootstrapping critical infrastructure that benefits the entire ecosystem.
Most importantly, by welcoming Lyra to the Round Table and building deep liquidity for their token, we hope to foster further innovation within the Arbitrum ecosystem. For example, deeper liquidity for Lyra could open up new opportunities for use in other DeFi primitives.
The quest for $GRAIL
The Camelot Castle has quickly become the natural home for Arbitrum native protocols, and we’re excited to be supporting so many builders.
In just over two months, Camelot now has over $36m TVL, with a current daily trading volume of $18m. The Round Table has expanded significantly, with Vela, Justbet, Factor, Perpy, Plutus, and many more joining the ranks. In the coming weeks, we’re excited to host the exclusive launch of some of the most promising Arbitrum protocols.
Nitro Cartel will be hosting their public sale on Camelot starting 17th Feb, with Factor DAO following shortly after on the 20th. The excitement continues, with several more launches planned for March and beyond.
We’re proud to be supporting the entire Arbitrum ecosystem, and we thank our Knights for their loyal support.