Keep custody of your tokens with token wrappers

Merkl is infrastructure, not a custodian

In most Merkl setups, you prefund the campaign upfront by transferring your reward tokens to Merkl's distribution contracts. For large clients and specific setups, however, we offer a custody-preserving path where you never have to hand over the reward tokens. Merkl remains a distribution layer in both cases (it computes who deserves what and publishes the Merkle proofs), and in this custody-preserving setup the tokens stay in your treasury, multisig, or any address you control until the moment a user actually claims.

This is made possible by token wrappers: small contracts that wrap your reward token and pull the underlying funds from your address on claim via a standard ERC-20 allowance. From the user's perspective, nothing changes — they still claim the underlying token. From your perspective, the budget never leaves your control.

Why this matters

• No prefunding required. No upfront transfer to a Merkl contract. You only spend what's actually claimed.
• Unclaimed tokens stay with you. Users who never claim don't cost you anything — leftovers remain in your treasury.
• Adjust at any time. Revoke the allowance to pause, or top up your treasury to extend. You don't need a Merkl operation to change course.
• Fits any governance process. The approval can come from a multisig, a DAO vote, or any custom signer — same pattern you already use.

How to deploy a wrapper

Deploy one directly from the Studio in a few clicks: Studio → Token Wrappers. Four templates are available:

• Pull-on-Claim — the standard custody-preserving wrapper. Tokens stay in your address, pulled on claim. Best for airdrops, TGEs, and campaigns with uncertain final spend.
• aToken Unwrapper (Aave) — same mechanism, tailored for Aave v3 aTokens. Withdraws from Aave on claim so users receive the base asset.
• Auto-Vault (ERC-4626) — pulls from your address and deposits into an ERC-4626 vault on claim, so rewards compound from day one.
• Native Token Unwrapper — distribute wETH, auto-unwrap to native ETH on claim.

Once deployed:

1. Approve the wrapper contract to spend the underlying token from the address holding your treasury.
2. Hold enough underlying tokens in that address to cover expected claims.
3. Launch your campaign on Merkl using the wrapper as the reward token.

That's it — no token ever leaves your address unless a legitimate user claims it.

Practical example: renew campaigns without waiting for leftovers

A common pain point without wrappers: when a campaign is about to end, you can't recycle the undistributed budget into the next one until the current campaign closes and the leftovers are returned to your wallet. With a Pull-on-Claim wrapper, you sidestep the wait entirely.

Setup:

1. Deploy a Pull-on-Claim wrapper for your reward token.
2. Launch your first campaign with a 100k token budget using the wrapped token.
3. One week later, the campaign has a few hours left and you can see only ~80k will be distributed — 20k will remain undistributed.
4. Without a wrapper: you'd have to wait for the campaign to end, claim back the 20k leftovers, and only then launch the next campaign.
5. With the wrapper: create the renewal campaign immediately with another 100k wrapped tokens. You know the 20k will become available later, so you're not double-funding — your treasury only needs to cover net claims.
6. When the old campaign ends, claim the 20k leftovers and send them back to the Pull-on-Claim wrapper's address to top it up.

Net effect: zero downtime between campaigns, no idle capital, and no scrambling to top up at the wire.

Learn more

For the full technical breakdown, custom use cases, and time-gated claims for TGEs, read the token wrappers section of the Merkl docs.