What budget should you set for your campaign?

Overview

The ideal campaign budget depends on your specific objectives and the distribution method you choose. Campaign budgets follow a natural supply-and-demand dynamic: liquidity providers want to maximize their rewards, while campaign creators aim to minimize costs. As a result, TVL typically scales proportionally with the reward budget you allocate.

Account for fees

Depending on your campaign type, you need to account for fees differently. See the fees section in the Merkl docs for details on how fees apply to your specific campaign type before finalizing your budget.

Choose the right distribution method

If you're concerned about over-distributing rewards early in your campaign, consider using a capped APR campaign. This approach ensures you don't exhaust your budget too quickly if TVL starts low: rewards are distributed at a fixed rate relative to TVL rather than depleting a fixed token amount.

Benchmark APRs

To gauge appropriate reward levels, you can:

• Browse existing campaigns on the Merkl app to see typical APRs in your category
• Use Merkl's APR simulator to model how different reward budgets translate to APRs at various TVL levels
• Adjust your budget based on competitive rates and your growth targets

Start small, iterate often

We recommend launching shorter campaigns initially (e.g., 2 weeks) to test performance and gather data. You can then create follow-up campaigns with optimized parameters based on actual TVL, user engagement, and APR effectiveness.

This iterative approach minimizes risk and maximizes ROI.