Why Camelot, the Arbitrum DEX, Is Worth Watching: A Multi-dimensional Analysis

Author: 2lambroz.eth

Compiled by: TechFlow

TLDR:Camelot is a DEX supporting both Uniswap V2 and Curve-like stablecoin pools. Given its strategic positioning, Camelot has become the launchpad and primary swap for new projects on Arbitrum.

What is Camelot

Camelot operates a dual AMM model (Uniswap V2 and Curve-style stablecoin swaps), with the following additional features:

a) Dynamic directional fees that allow different fee settings in each swap direction

b) Referral system enabling projects to promote their LPs through marketing referrals

c) Staked LP positions are wrapped into NFTs (spNFTs)

d) Nitro Pools

Camelot's Dual AMM

Camelot offers two types of AMM models:

• x*y=k (Uniswap v2)

• x³y + y³x = k (for correlated assets such as stablecoins or LSDs)

Traders are automatically routed to the appropriate pool based on asset type, while LPs can choose which pool to deposit into.

a) Dynamic Directional Fees

In short, this allows pool creators to set different fees depending on the swap direction (buying or selling). This enables projects to incentivize specific trading directions according to their needs.

b) Referrals

A referral system that allows projects to use referral marketing to promote their liquidity providers (LPs).

c) Staked LP Positions Wrapped into NFTs (spNFTs)

Camelot’s staked LP positions can be wrapped into spNFTs, with each position containing its own basic information:

• Unique ID
• Deposited LP token
• Amount of LP tokens
• APY
• Optional lock settings (duration, start/end time)
• Multiplier information

(d) Nitro Pools

Nitro is a protocol tool designed to incentivize liquidity provision.

There are two distinct types of Nitro Pools:

• Official Nitro Pools – can be created by anyone

• Community Nitro Pools – can only be deployed by participants

$Grail Token

There are two tokens within the Camelot ecosystem: $Grail and $xGrail. $Grail can be staked into $xGrail, which is a non-transferable, escrow-managed token.

🔹$xGrail is designed for users to allocate toward preferred uses:

• Share in protocol dividends (22.5% of protocol fees)
• Boost yields on spNFT positions
• Launchpad access
• Access to Camelot and community-developed plugins
• Voting rights

🔹How to redeem $xGrail → $Grail:

• Minimum vesting period of 15 days provides a 1:0.5 ratio
• Maximum vesting period of 6 months provides a 1:1 ratio

🔹12.5% of protocol fees are dedicated to $GRAIL buybacks and burns.

How to Participate in $Grail?

Let’s begin with some key metrics.

Holder Balances

$Grail holders (3,342) vs. $xGrail holders (2,279).

This gives a rough idea of how many people (xGrail holders) are committed to long-term locking and alignment with the protocol.

Note that $Grail holders may provide LPs, and xGrail holders can exit early at a 50% reduction when converting $xGrail → $Grail.

Comparison Across Several Swaps

CamelotDEX:

🔹Market Cap: $23.15M

🔹Circulating Market Cap: $11.23M (accounting for conversion to xGrail)

🔹FDV: $91.89M

🔹TVL: $30M

🔹30-day Fees: $142,416

🔹FDV/TVL: 3

QuickswapDEX (Matic):

🔹Market Cap: $29M

🔹FDV: $57M

🔹TVL: $18.3M

🔹30-day Fees: $22.2M

🔹FDV/TVL: 0.42

PancakeSwap:

🔹Market Cap: $73.7M

🔹FDV: $3B

🔹TVL: $2.5B

🔹30-day Fees: $84.1M

🔹FDV/TVL: 1.31

Trader Joe:

🔹Market Cap: $89M

🔹FDV: $132M

🔹TVL: $70M

🔹30-day Fees: $2M

🔹FDV/TVL: 1.88

Here Are My Thoughts

🔹The effective market cap is $11.23M. In an extreme scenario where everyone stakes xGrail at the minimum 15-day term (0.5x rate), the market cap would be approximately $16–17M.

🔹Compared to Quickswap, Camelot has a relatively high FDV. However, if you're bullish on Arbitrum, AVAX, or BNB-based exchanges, Camelot's market cap and FDV appear reasonable despite lower recent fee volume.

🔹Catalyst 1: The Arbitrum token — when Arbitrum eventually launches its token, which platform will host the largest swap and yield farms?

🔹Catalyst 2: New projects on Arbitrum are launching rapidly, and Camelot is emerging as the preferred launchpad.

🔹In summary, although prices have already risen somewhat, $Grail may still have room to grow based on its $11.23M "circulating" market cap. However, I’ll be closely watching how many people unstake their xGrail, the number of new projects launching on Camelot, and their performance. Long-term, while I remain bullish on Arbitrum, we need to monitor Camelot’s growth in TVL, trader count, and fee generation—metrics where it significantly differs from other DEXs.

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