TelxIP - Merkl Proof of Concept Evaluation for TELx Base TEL–ETH v4 Pool

Council Proposals TELxIP
1

Submitted by: Ty Akemi - Telx Council Member
Date: 21-Feb 2026
Status: For Discussion and Review prior to Snapshot vote

Abstract

This proposal seeks approval to conduct a minimum 4-week (or longer if deemed necessary) evaluation of Merkl as a potential incentive calculation engine using the live TELx Base TEL–ETH v4 Uniswap pool for comparison.

This Merkl Proof of Concept (POC) will run in parallel with the existing weekly reward distribution mechanism. No additional TEL will be distributed. The POC will generate simulated reward allocation outputs solely for analytical comparison against the current distribution model.

The goal is to assess accuracy, transparency, operational feasibility, and variance between systems, before any consideration of future changes or a wider implementation of Merkl reward distribution mechanism for other Telx liquidity pools.

Motivation

Evaluating Merkl allows the Telx Council to make data-driven decisions rather than relying on assumptions. Specifically, the evaluation will enable the Council to:

  • Compare calculation methodologies

  • Measure output variance

  • Assess transparency and auditability

  • Evaluate operational complexity

  • Determine reporting clarity

This ensures any future governance discussion is grounded in real-world, measurable results.

Specification

  • Pool: Base TEL–ETH v4 (Uniswap)

  • Network: Base

  • Duration: 4 consecutive weeks (with possible extensions if required)

  • Output: Weekly simulated reward allocation reports from Merkl

  • Distribution: Simulation only – no additional TEL distributed

Deliverables:

  • Weekly comparison reports (Merkl vs. live distribution)

  • Quantitative variance analysis

  • Observations on calculation logic differences

  • Final weekly summary evaluation

No live contract modifications or reward flows will be altered.

Rationale

A parallel evaluation provides:

  • Zero economic risk

  • No emission changes

  • No disruption to liquidity providers

  • Clear visibility into methodological differences

  • Practical insight into reporting transparency and evaluates ease of use/implementation

A minimum four-week duration allows multiple weekly cycles, reducing anomalies and enabling meaningful analysis. This POC is purely evaluative and does not imply adoption. After 4-weeks, if the Telx council deem necessary ,the evaluation can be extended on a week by week basis to enable further analysis and data gathering.

Future Benefits to the TELx Council

If evaluation results are favorable, Merkl could offer:

  • Governance Transparency: Clear, auditable reward calculations

  • Policy Flexibility: Adjustable pools, weights, or reward models

  • Emission Discipline: Ties rewards to measurable participation

  • Operational Efficiency: Reduced manual tracking and reporting

  • Data-Driven Decisions: Quantitative insight for incentive strategy

Implementation

Phase 1 – Development & Configuration (Weeks 0–2)

The following document should be used as a reference – Telx -Merkl Integration notes

In summary :

  • 2-week Merkl integration with TELx to ensure only “subscribed” positions are included: ie Gate Merkl liquidity mining rewards so that only Uniswap v4 liquidity providers who have subscribed to the TELx incentive program are eligible for rewards.

  • Merkl schedule ongoing development on Fridays; so expected delivery would be two Fridays after approval

  • Activities:

    • Configure parameters to match current Base TEL–ETH v4 weekly reward logic

    • Track on-chain LP positions and time-weighted exposure

    • Validate that no reward transfers are enabled

Phase 2 – Parallel Evaluation (Weeks 3–6 or extended as required)

  • Run Merkl simulation in parallel with live reward distribution

  • Generate weekly simulated reward allocation outputs

  • Produce weekly comparison reports

Phase 3 – Review & Findings

  • Aggregate the compiled weekly data

  • Conduct variance and operational assessment

  • Present findings to Telx Council for review

Cost

  • Merkl Service Fee: $6,000 USD

  • Payment: Flexible installments (e.g., 6 monthly payments of $1,000 USD)

  • Economic Risk: Zero TEL emissions, no reward duplication, no user-facing impact

  • Development Timeline: 2-week integration as described above

It is proposed that this cost be drawn down from the existing Telx operational wallet of which there are sufficient funds available, so there will be no impact to projected Telx reward distributions

Conclusion

This Merkl POC offers a low-risk, data-driven evaluation of a programmable incentive engine. Running a minimum four-week parallel simulation (or longer if required) alongside the Base TEL–ETH v4 pool allows the Telx Council to compare outputs, assess operational feasibility, and inform potential future governance decisions.

Discussion Points / Voting Consideration:

  1. Approval to initiate Merkl POC with $6,000 service fee

  2. Confirmation of minimum 4-week parallel evaluation period, which can be extended if required

  3. Agreement on reporting and review methodology

TELx Merkl POC Executive Brief

Objective:
Run a minimum 4-week parallel simulation of Merkl reward calculations for the Base TEL–ETH v4 Uniswap pool. No additional TEL will be distributed. Evaluate Merkl’s accuracy, transparency, and operational feasibility.

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Conclusion

The Merkl POC provides a low-risk, data-driven evaluation of a programmable incentive engine. The weekly simulation alongside the live TEL–ETH v4 pool allows Council to compare outputs, assess operational feasibility, and inform potential future incentive governance.

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