TELxIP: Implementation of Merkl Across TELx Pools
About Merkl
Merkl is a leading onchain incentive and reward distribution platform used by DeFi protocols to create, manage, and distribute reward campaigns to users who perform eligible actions, such as providing liquidity to specific pools.
Merkl has become one of the most widely used incentive distribution platforms in DeFi, supporting reward campaigns across multiple chains, protocols, and liquidity pools. Its infrastructure allows protocols to define campaign parameters, eligibility criteria, campaign duration, and reward assets, with rewards then calculated and distributed to eligible participants based on the campaign rules.
For liquidity campaigns, Merkl provides tools to support configurable reward distribution, including concentrated liquidity campaigns where rewards can be tailored based on how liquidity is provided within a pool.
For TELx, partnering with Merkl reflects the Telcoin Association’s intention to work with established, high-quality infrastructure providers when implementing scalable liquidity incentive programs.
Abstract
This proposal seeks approval for the TELx Council to partner with Merkl for ongoing reward distribution and campaign management support across eligible TELx liquidity pools.
Following the successful approval and implementation of the Merkl Proof of Concept for the TELx Base TEL–ETH v4 pool, this proposal requests approval to expand the use of Merkl beyond the initial pool and adopt Merkl as a standard operational partner for TELx liquidity incentives going forward.
If approved, the TELx Council would be authorised to create and manage Merkl campaigns for all current Uniswap v4 TELx pools and future TELx pools approved by the TELx Council. This would include standard weekly TEL reward campaigns, as well as targeted ad-hoc campaigns to help bootstrap newly introduced TELx pools where appropriate.
Motivation
The Merkl Proof of Concept was introduced to evaluate whether Merkl could provide a transparent, efficient, configurable, and scalable way to support TELx liquidity reward calculations and distributions. With the Proof of Concept having been completed, the next step is to adopt Merkl more broadly as an operational partner across the TELx ecosystem.
As TELx expands across multiple pools, assets, and chains, the Council requires a reward distribution partner that can support both recurring weekly campaigns and more flexible incentive strategies.
Merkl provides TELx with the ability to:
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Standardise weekly reward distribution across multiple pools and chains
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Improve transparency for liquidity providers
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Reduce manual operational requirements
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Support scalable TELx expansion into additional chains and liquidity pools
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Configure and adjust reward campaigns on a campaign-by-campaign basis
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Support both wide-range and narrow-range liquidity strategies
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Launch targeted campaigns when new TELx pools are introduced
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Bootstrap liquidity in new pools through ad-hoc TEL reward incentives
The ability to bootstrap new pools is important. When a new TELx pool is introduced, early liquidity can help make that pool more useful, competitive, and attractive to future participants. Without sufficient liquidity, swaps cause high slippage as each trade moves the pool’s price more dramatically, resulting in users receiving fewer tokens than expected or paying more than expected.
Specification
This proposal authorises the TELx Council to partner with Merkl as the ongoing TEL reward distribution and campaign management provider for eligible TELx liquidity pools.
Scope:
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Pools: All current Uniswap v4 TELx pools and future TELx pools approved by the TELx Council
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Networks: All current and future supported chains where TELx pools are deployed
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Reward Asset: TEL
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Standard Campaign Frequency: Weekly Merkl campaigns
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Additional Campaign Type: Ad-hoc Merkl campaigns for bootstrapping new pools
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Campaign Management: TELx Council, supported by Merkl infrastructure
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Standard Weekly Reward Amount: Approved weekly TEL reward amount, excluding Merkl fees
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Merkl Fee: Applicable Merkl fee percentage, based on the amount of rewards
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Duration: Ongoing, subject to Council review and future governance decisions if required
The TELx Council will be responsible for deciding which TELx pools are included, the relative weighting of rewards between eligible pools, the configuration of weekly campaigns, the creation of targeted campaigns for new pools, and the future inclusion of newly launched TELx pools.
The TELx Council may review and adjust these decisions on an ongoing basis in response to liquidity conditions, campaign performance, market conditions, technical requirements, or TELx ecosystem priorities.
Where the Council decides to make a material change to pool eligibility, reward weighting, or campaign configuration, the community will be notified in advance, with at least 10 days’ notice where reasonably practicable.
Campaign Parameters
One of the key features tested during the previous Merkl implementation was the ability to configure campaign parameters by adjusting the percentage weighting applied to three reward calculation metrics:
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Active tick liquidity
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Token0 TVL
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Token1 TVL
This proposal authorises the TELx Council to use these configurable campaign parameters when creating Merkl campaigns.
A campaign may place greater emphasis on token0 TVL and token1 TVL where the Council wishes to support broader liquidity depth, encourage wider-range liquidity positions, or accommodate liquidity providers who prefer a set-and-forget strategy. This can help keep more users interested in providing liquidity to TELx pools, particularly those who do not want to actively manage narrow positions.
A campaign may place greater emphasis on active tick liquidity where the Council wishes to encourage liquidity providers to maintain liquidity in a narrower, tighter range. This can support more efficient in-range liquidity and reward LPs who actively position liquidity to target swap fees.
Deep in-range liquidity can help trades execute more efficiently, reduce price slippage, support tighter spreads, improve price stability, and make TELx pools more attractive to traders, aggregators, and liquidity providers.
This flexibility means TELx campaigns do not need to apply a single uniform reward calculation across all pools or users. Instead, the TELx Council can tailor campaign parameters to the needs of each pool, chain, campaign period, or strategic objective.
Rationale and Future Benefits
Expanding Merkl across TELx pools allows the Council to apply the findings of the POC to the broader TELx liquidity program.
An ongoing partnership with Merkl can provide greater consistency, improved visibility for liquidity providers, reduced manual administration, better scalability across multiple pools and chains, and stronger flexibility for future TELx growth.
Merkl also gives the TELx Council a practical tool for supporting new pool launches. Targeted bootstrapping campaigns can encourage early LP participation, improve initial liquidity depth, support better trading conditions from launch, and allow the Council to adjust or end campaigns based on performance.
Over time, campaign data may also help inform future TELx Council decisions, including pool eligibility, reward allocation, metric weighting, and whether specific pools should continue receiving incentives.
One issue with the current TEL rewards distribution model is its reliance on a custom Uniswap v4 hook. While this provides the specific fixed functionality we need, it also adds complexity to the pool setup and user experience. Several aggregators are cautious about interacting with pools that use custom hooks and therefore avoid them entirely when sourcing liquidity.
By using Merkl, the custom v4 hook would no longer be necessary. This should make any new v4 pools simpler, easier to use, and more compatible with aggregators, allowing them to interact with those pools without friction.
In Summary
This proposal seeks approval for TELx to partner with Merkl for ongoing TEL reward distribution and campaign management support across current Uniswap v4 TELx pools and future TELx pools approved by the TELx Council.
Approval would allow the TELx Council to create weekly Merkl campaigns, configure campaign parameters, adjust reward and metric weightings, support new pool bootstrapping campaigns, and apply Merkl to future TELx pools within the approved TELx incentive framework.
The Summary Report for the TELx Merkl Proof of Concept, outlining the project scope, approach, findings, and outcomes can be found here :
Proposal Decision
A vote in favour approves the TELx Council’s ongoing use of Merkl as described in this proposal.
If approved, a typical implementation plan would include giving current liquidity providers adequate notice and time to withdraw or reposition existing liquidity from pools being transitioned to Merkl campaigns, and specifying the start date from which the relevant pool will become active under the Merkl reward distribution process.
A vote against rejects the ongoing use of Merkl as described in this proposal.