Also wanted to address the concerns of people considering Merkl as a “new” solution. While the system has only been used as a standalone product for more than 3 months now, it’s been the primary incentive solution for Angle protocol to incentivize agEUR pools since August 2022. $ millions of incentives have been streamed using the system.
In fact, the launch of the Merkl system coincided with:
- an increase in the efficiency of the incentives sent to the UniswapV3 pools with agEUR
- an increase in the utilization of these pools and more globally an increased in agEUR volume
Increased incentive efficiency
This dashboard shows data about the agEUR-USDC pool, its TVL and incentives sent to the pool.
If we look into the period between the 1st of September 2022 to the 23rd of January 2023, the $ amount of incentives sent to the pool decreased, while the TVL remained practically constant accounting for more efficient incentives.
Precisely speaking, between August to February, incentives decreased on average by 74% while TVL decreased by only 14%.
The same dynamic went for the agEUR-ETH pool on UniswapV3 (check out this dashboard).
Increased agEUR volume
Since the launch of Merkl, the concentration of liquidity on both agEUR-USDC and agEUR-ETH pools grew, with more concentrated liquidity positions around the spot price. Users swapping from or to agEUR faced less slippage, and this allowed the agEUR volume to grow substantially during the same period with respect to other similar Euro stablecoins (source).
In the period from September 2022 to February 2023, the agEUR market cap remained constant but the share of DEX stablecoin trades with € stablecoins involving agEUR moved from 59% to 75%, due notably to the effect of Merkl.
Going further, apart for some outliers in the data due to weeks with large activity (after notably the Luna crash), the weekly utilization of the pools using Merkl also increased after the launch of the system.
For the agEUR-USDC pool, it moved from an average of 90% prior to an average of 130% in March.
So all in all, Merkl is not a new system, it’s also a system that made its proofs when it comes to increasing volume on pools.