Incentives

Arch’s incentive system provides a robust, efficient, and user-friendly solution for distributing rewards to liquidity providers. Developed entirely by Arch, this system combines both on-chain and off-chain components, offering flexibility for protocols and users to create tailored campaigns to suit their specific needs.

Key Features

• Unified Incentive Distribution Supports v3 and v4 (v4 forthcoming).

• Permissionless Any protocol can utilize the system, which is compatible with all tokens, including ARCH and xARCH.

• Highly Customizable Campaigns Includes features such as Blacklist/Whitelist modes, token weight adjustments, depth-based incentives, and the ability to evolve campaigns over time.

• Deep Partners Integration Works seamlessly with Advanced Liquidity Managers (ALMs) and is compatible with any protocol providing liquidity to Arch, ensuring an optimal user experience.

• Streamlined Reward Collection Consolidates all incentive and emission harvesting into a single, simple step.

How the System Operates

The system is designed to efficiently manage reward distribution while offering protocols the flexibility to tailor their campaigns.

For detailed guidance on setting up a campaign, please refer to the campaign creation guide.

Overview

• Campaigns are initiated and fully managed on the blockchain.

• An off-chain script computes rewards for liquidity providers (LPs).

• The script runs in ~2-hour (TBC) cycles, calculating rewards based on the conditions set during campaign creation.

• Users can:

  • Retrieve positions via our API.

  • Claim pending rewards from the distributor contract at any time.

Reward Eligibility and Distribution

Users only need to provide liquidity to qualify for rewards—no additional steps are required.

V3 Pools Rewards are determined by the fees generated within each epoch.

V4 Pools Information on V4 Pool rewards is forthcoming.

Unlike other systems, Arch calculates the exact fees generated by each position during every cycle, ensuring:

• Precise reward calculations.

• Protection against manipulation or gaming of the system.

Example: A user adds liquidity to the ETH/USDC pool.

• V3 Pools: If the user contributes 2% of the fees, they will earn 2% of the rewards.

• V4 Pools: Additional information on V4 Pools is forthcoming.

Campaign Customization

Blacklist/Whitelist Modes

• (V3 and V4 [TBD]) Use a blacklist to exclude specific addresses or a whitelist to include only certain addresses.

Token Weighting

• (V3 and V4 [TBD]) Assign weight to specific tokens, allowing rewards to be determined not just by fees, but by the token composition of the position. This encourages positions with a higher proportion of a desired token.

Depth Criteria (WIP)

• (V3 and V4 [TBD]) Reward or exclude positions based on price ranges.

• Set minimum or maximum liquidity depth to target particular price ranges.

Example: A campaign for the ARCH/USDC pool might be configured with the following weights:

• Fees = 70%, TokenA (ARCH) = 20%, TokenB (USDC) = 10%. This ensures rewards are influenced by both fees and token holdings, incentivizing positions with more ARCH.

Campaign Fees and Conditions

• Tokens must be whitelisted for use in campaigns.

• Campaigns must run for at least 24 hours.

• A minimum of ~$50/day must be distributed for the campaign to be valid.

• A 1% fee is deducted from the rewards to cover infrastructure costs.

Example: A protocol launches a campaign for the ARCH/ETH pool, using USDC (whitelisted) as the reward token. The campaign runs for 7 days and distributes $500, meeting the ~$50/day requirement. A 1% fee is subtracted, leaving $495 for distribution among liquidity providers.

Partners and Integrations

Advanced Liquidity Managers

Users who provide liquidity through integrated ALMs will receive rewards directly and transparently.

Currently Integrated ALMs:

• JonesDAO

Example: A user provides liquidity to Arch through an integrated ALM. The system automatically tracks their position, and rewards are distributed directly to their wallet without the need for a manual claim.