TELxIP: TELx Liquidity Framework Alignment & Pool Standardization
Abstract
This proposal updates the TELx liquidity framework to align with the Telcoin Token Upgrade (TEL v2 → TEL v3) and establishes a unified, standardized pool structure across Ethereum, Polygon, and Base aligning with Uniswap, the most widely adopted and trusted decentralized exchange in the industry.
Under this framework, TELx will focus on a simplified and scalable pool design consisting of two core pools per chain—TEL/ETH (or WETH) and TEL/eUSD—across Ethereum, Polygon, and Base. In addition, the existing USDC/eMXN pool will be deprecated in favor of the eUSD/eMXN pool, aligning with the broader strategy to prioritize eUSD, issued by Telcoin Digital Asset Bank (TDAB).
With the launch of TEL v3, all liquidity incentives will transition to Uniswap v4 pools using the upgraded TEL token. Liquidity providers will be required to migrate their TEL v2 positions to TEL v3 before re-entering incentivized pools.
Reward distribution will be handled through Merkl, as defined in TELxIP: Implementation of Merkl Across TELx Pools.
This proposal positions TELx alongside industry-standard infrastructure, improves capital efficiency, and supports the long-term goal of establishing deep, accessible liquidity for TEL across all supported chains.
This proposal activates upon the successful governance approval and implementation of the Telcoin Token Upgrade and the Merkl TELxIP.
Specification
Pool Structure
The standardized TELx liquidity framework includes the following Uniswap v4 pools and fee tiers:
Ethereum
- TEL / ETH — 0.3%
- TEL / eUSD — 0.3%
Polygon
- TEL / ETH — 0.3%
- TEL / eUSD — 0.3%
- eUSD / eMXN — 0.05%
Base
- TEL / ETH — 0.3%
- TEL / eUSD — 0.3%
Incentives
- Each pool receives 500,000 TEL per week (reduced from 648,148)
- Incentives are reallocated from existing Balancer/Uniswap pools
- No new emissions are introduced
- Incentives apply only to TEL v3 liquidity positions after the transitionary period.
- Reward distribution will be executed via Merkl, as per the dedicated TELxIP
Eligibility Requirement
To receive incentives, liquidity providers must:
- Unstake existing TEL v2 positions from TELx
- Withdraw liquidity from TEL v2 TELx pools on Uniswap/Balancer
- Upgrade TEL v2 → TEL v3 using the official migration process
- Add liquidity to the new TEL v3 Uniswap v4 pools
- Subscribe the new LP NFT positions on TELx to begin receiving rewards
This ensures all incentivized liquidity is aligned with the upgraded token standard.
Legacy Pool Status
Balancer Pools (Deprecated Incentives)
- TEL / USDC
- TEL / WETH
- TEL / WBTC
These pools will:
- Remain active
- No longer receive incentives
- Continue generating fee-based returns only
Uniswap Pool Adjustment
- The USDC/eMXN pool on Uniswap will be deprecated
- Replaced by the eUSD/eMXN pool
Liquidity Provision Model
TELx will leverage Uniswap v4’s liquidity design:
Concentrated Liquidity (Primary Strategy)
- Optimized capital efficiency
- Higher fee generation
- Ideal for active LPs
Full Range Liquidity (Secondary Strategy)
- Provides continuous coverage during volatility
- Ensures liquidity availability if price moves outside tight ranges
This combined approach balances efficiency with resilience, supporting both active and passive liquidity providers.
Rewards Infrastructure
TELx will use Merkl as the reward distribution mechanism across all incentivized pools, as defined in TELxIP: Implementation of Merkl Across TELx Pools.
This provides:
- Advanced and flexible incentive mechanisms
- Support for rewarding both liquidity provision and fee generation
- Reduced reliance on custom smart contract infrastructure
Motivation
The TELx Council’s north star is to provide the deepest, most accessible liquidity for TEL across all supported chains. To achieve this, TELx must:
- Consolidate liquidity into high-impact trading pairs
- Reduce fragmentation across platforms and pool types
- Simplify the user experience
- Align with infrastructure that captures the majority of DeFi volume
Additionally, expanding liquidity around eUSD supports broader ecosystem alignment and strengthens the integration between TELx and Telcoin Digital Asset Bank (TDAB).
Rationale
1. Alignment with Uniswap
Uniswap remains the most widely used decentralized exchange. Standardizing TELx liquidity on Uniswap improves:
- Discoverability and accessibility
- Integration with aggregators and trading tools
- Participation from a broader set of liquidity providers
2. Optimal Asset Pairing
Liquidity will be concentrated around:
- ETH — the most widely traded and liquid asset in crypto
- eUSD — a Telcoin-native stablecoin issued by TDAB
This pairing strategy maximizes both external liquidity access and internal ecosystem alignment.
3. Expandable Pool Design
This proposal establishes an initial focus on core liquidity pairs aligned with strategic priorities, while maintaining flexibility to expand into additional pools as the ecosystem evolves.
4. Transition from Legacy Infrastructure
Balancer pools remain active but unincentivized, signaling the preferred direction for liquidity.
Implementation Timeline
Phase 1 — Governance & Approval
- Proposal reviewed and refined by community and TELx Council
- Submitted to Snapshot for voting
- Contingent on TEL v3 passing governance and being implemented
- Contingent on Merkl TELxIP passing governance
- Subject to Compliance Council review
Phase 2 — Notice & Preparation
- Upon approval, the community will receive two weeks’ notice before incentives transition from the legacy pools to the new TELx liquidity framework.
- The transition will be coordinated with the anticipated launch of the TEL2 → TEL3 upgrade portal, where possible, to provide users with a clear window to complete their token upgrade and prepare for the new liquidity pools.
- Additional implementation guidance and migration information will be provided ahead of the transition.
Phase 3 — Deployment
- Launch new TEL v3 Uniswap v4 pools across Ethereum, Polygon, and Base
- Update incentives for existing TEL/ETH pools
- Initiate Merkl-based incentive distribution
- Maintain legacy pools in non-incentivized state
Phase 4 — Clean Incentive Transition
- At the conclusion of the two-week notice period, 100% of TEL incentives will transition to the new pools.
- Liquidity providers participating in the new incentivized pools must complete the TEL2 → TEL3 token upgrade and subscribe their Uniswap LP NFT through the TELx platform to qualify for incentives.
Phase 5 — Post-Transition Optimization
- Monitor liquidity, trading volume, fee generation, and incentive participation across the new pools.
- Adjust the liquidity and incentive strategy as necessary based on performance and community feedback.
Timeline
This TELxIP activates in a week upon the launch of TEL v3.
At that time:
- New TEL v3 pools will be deployed
- Liquidity providers will migrate from TEL v2 → TEL v3
- Incentives will begin flowing to TEL v3 pools via Merkl
No specific date is included, as activation depends on the official TEL v3 release.
Expected Outcomes
- Deeper TEL Liquidity Across Chains – Concentrated pools improve depth and trading efficiency
- Improved User Experience – Standardized pool structure reduces complexity
- Increased Trading Volume & Fees – Better aggregator compatibility may improve routing and activity
- Stronger Ecosystem Alignment – eUSD integration supports Telcoin’s broader financial strategy
- Flexible, Future-Ready Framework – Supports evolving reward systems and infrastructure decisions
Budget & Funding Source
- Incentives funded through reallocation of existing TEL emissions
- No new emissions required
Precedent
This proposal establishes the preferred liquidity framework for TELx going forward, aligned with industry-leading infrastructure and the upgraded TEL v3 token standard.