Archly: Rainbow Arc
It is with great pleasure to announce that Archly has teamed up with the Telos Foundation to join the Telos Fuel Initiative. This collaboration will enable the launch of Rainbow Arc. The primary goal of Rainbow Arc is to help build Total Value Locked (TVL) on the Telos EVM (tEVM) by providing more value to all participants in the Archly protocol. Rainbow Arc aims to do this through building deep levels of liquidity on the tEVM, rewarding those who share the long-term vision of Archly and Telos, helping to lower cost of incentives for projects on Telos, and attracting new projects onto the tEVM.
By now you have probably seen some form of the image above, the Archly Flywheel. It is a picture that embodies the cyclical nature of how all participants in Archly interact to help each other benefit. Essentially, everyone wins. veArc holders win when Protocols (Projects) create bribes and Traders generate fees. Traders and Protocols win due to the low slippage and low fees held up by the deep level of assets provided by Liquidity Providers. And Liquidity Providers win by earning Arc emissions based on the votes cast for their pools by the veArc holders.
This system also benefits Archly and Telos by efficiently directing Telos Fuel incentives based on how long Arc tokens are locked into veArc. The locked Arc, which can be locked from one week up to four years, also adds to the TVL of Archly and Telos. A win for both teams. But here’s the twist. Those that lock their Arc the longest, up to four years, have a greater share of voting power and lock in longer-term TVL for the tEVM and therefore receives a larger amount of the bribes and fees. A win for veArc holders, Archly, and Telos. On the other hand, those who lock their Arc for the minimum amount of time, one week, provide short-term TVL for the tEVM and by doing so have the minimum voting power and results in them receiving the least amount of bribes and fees. Still a win for veArc holders as it provides a bit of flexibility for newcomers to test the waters.
With the preamble out of the way, let us get to why we are here. . .
Rainbow Arc
As mention above, Rainbow Arc’s purpose is to help grow the Telos ecosystem by providing Telos Fuel to the Archly Flywheel. It is composed of two types of incentives, Base Incentives and Boost Incentives, that will run for 3 to 6 months from the launch on February 23rd at 8:00 PM UTC. TLOS will be used as the incentive token for both types of incentives.
Base Incentives
Base incentives will be used to provide bribes to select base pools that are deemed essential public good pairings (initially TLOS-sTLOS, USDC-USDT, TLOS-USDC, TLOS-ETH, TLOS-BTC, and TLOS-ARC) to promote voting for these pools. This in turn will drive more Arc emissions towards these pools, which will attract more liquidity providers to deposit assets into the pools to earn more Arc, ultimately creating a deep base layer of liquidity for protocols and traders to use on the tEVM. Further driving more input into the Archly Flywheel.
The pools that the TLOS incentives are allocated to and the amounts of TLOS for each pool will be re-evaluated from time to time and adjusted to align with the current liquidity goals of Archly and Telos on the tEVM. So make sure you follow us on Twitter or pop into our Telegram to stay up-to-date on the latest developments. To start, the following weekly allocation of TLOS incentives will be distributed as follows:
Yes, that’s right! To start, 25K of TLOS will be distributed as bribes each week while Rainbow Arc is in effect. Great! We have a plan to build a rich base layer of liquidity that help spin the Archly Flywheel more for veArc holders, Traders, Liquidity Providers, and existing Protocols on Telos. How do we go about drawing new Protocols to the tEVM? Well, that is where the Boost Incentives come into play.
Boost Incentives
Boost incentives are designed to accomplish the following objectives:
- Help ease protocols into the Archly bribe wars.
- Provide additional incentives to build a deep layer of liquidity for new and existing protocols launched on Telos.
- Attract new protocols from other networks to deploy on the tEVM.
Focusing on these three objectives helps to strengthen our current ecosystem on Telos, attract new entrants to the Telos ecosystem, and teach them the ways of the bribe.
First a little background. Normally protocols tend to bootstrap by using the protocol’s token as a means to incentivize liquidity or take a large sum of tokens to LP. This results in the team minting a large or endless amount of tokens to support this in order to keep the attractive APRs liquidity providers are expecting. Or locking up a large portion of capital to maintain liquidity for their pairing. Using a Protocol’s own token to provide direct incentives leads to the dilution of the value for other holders and leaves the team looking for more creative ways to hold on to the value that exists. On top of that, it becomes a distraction for the team and keeps them from fully engaging on their vision. Likewise, if large sums of capital are used to create pools for their token, then those funds are not being used for other purposes. Both scenarios lead to an inefficient use of the Protocol’s funds, that could be better spent providing value to its users.
Well there is good news for protocols on the tEVM and protocols on other networks with the arrival of Archly. Protocols no longer need to exhaust their token reserves in order to build liquidity or provide high levels of incentives to keep the masses happy. The also do not have to set aside large amounts of funds to provide liquidity. They can offload these to the Archly protocol and allow the Arc token to take the place of the project’s token to incentivize liquidity. By whitelisting and onboarding the project’s token to Archly, they gain the ability to simply provide bribes to their pool through Archly’s UI (pictured above). No need to spend time or funds developing, testing, deploying smart contracts and the accompanying website to directly incentivize users or liquidity providers. It’s already available and all self-service. Instead the team can use some of those fund to bribe their pool and use the rest for the Protocol’s benefit. From there the Archly Flywheel kicks in through veArc voters directing Arc emissions toward the protocol’s pool, thus drawing liquidity to the Protocol’s pool on Archly. Going this route extends the team’s runway and allows them to focus on making their protocol great. The protocol can further benefit from Archly by obtaining Arc to lock and vote for the pool they created and earn fees that they can redirect back into the protocol or provide more bribes or add to the liquidity pool to earn more Arc that can be locked to vote some more.
Another loop in the Archly Flywheel.
Tip: Anyone (Traders, Liquidity Providers, Protocols, and veArc holders) can all employ this strategy to earn more. As always, this is not financial advice (NFA) and you should do your own research (DYOR) to make sure this fits your plan.
But the story gets better with the Boost incentives from Rainbow Arc. For select protocols, the Telos Fuel team has allocated up to 10K TLOS/week for Archly to use to boost a protocol’s bribe (up to $3000, based on a 7 day average of the bribe tokens price) by 25% (for a maximum of $750 worth of TLOS) and Archly will use up to 5% of the team’s veArc to vote for the pool that was bribed for one week. A couple of examples:
- Protocol A creates a bribe for $1000 worth of Protocol A’s token, then Archly will add an additional bribe worth $250 worth of TLOS to the pool bribed by Protocol A.
- Protocol B creates a bribe for $4000 worth of Protocol B’s token, then Archly will add an additional bribe worth $750 ($3000 [the max] x 25%) worth of TLOS as a bribe to the pool bribed by Protocol B.
The Boost incentives will be limited to 2-4 protocols at the start and will be provided in increments of two weeks. As with the Base incentives, the Boost incentives will be re-evaluated and adjusted based on the data available.
There you have it, Archly’s Rainbow Arc provides Base Incentives for strategic public good pools and Boost Incentives for new or emerging protocols on the Telos EVM.
Some additional changes . . .
- Seeing that there is a shared interest between the Telos Foundation and Archly in supporting the growth of the Telos EVM ecosystem, Archly has offered the Telos Network Fund 500K Arc tokens. This to help the Telos Foundation show support for Archly and the protocols on Archly by joining in on the Archly Flywheel where they see fit to do so.
- The team’s weekly emission will be changed from 3% to 5%. The 2% increase will also be offered to the Telos Network Fund to provide additional benefits for TLOS holders while increasing their shared interest in Archly.
- Finally, the trading fees for volatile and stable pairs will be increased from 0.03% to 0.05%. This change will help with the accrual of fees for veArc holders while still maintaining the lowest trading fees on Telos.
These changes will also go into effect on February 23rd at 8:00 PM UTC.
This is the way.
