A comprehensive guide to the Degenerate Capital Allocators protocol - an automated SPX6900 accumulation strategy built on Uniswap V4
The Degenerate Capital Allocators (DCA) protocol is built on Uniswap V4 and implements an automated SPX6900 accumulation strategy. The protocol operates through two interconnected pools and leverages Uniswap V4 hooks for access control and fee management.
The Uniswap V4 hooks serve two main purposes: preventing external liquidity providers from adding liquidity to the ETH/DCA trading pair, and ensuring all liquidity in the DCA/SPX6900 pool is full-range. All fee collection, liquidity management, and SPX6900 purchases are handled by the system contract.
Fee Capture → Reinvestment Loop: Trading in ETH/DCA and DCA/SPX generates fees. Those fees are harvested and redeployed to buy SPX6900 and provide liquidity, compounding returns.
This creates a positive feedback loop where trading fees are automatically reinvested to accumulate SPX6900 and provide protocol-owned liquidity. The system acts as a soft sink for DCA tokens, reducing circulating supply over time while compounding protocol reserves through continuous fee capture and reinvestment.
Users trade and generate fees
Collect ETH and DCA fees
Swap collected ETH for SPX
Add liquidity in full range, generate fees
Continuous Cycle: Fees generated from trading are claimed from both pools, ETH is swapped to SPX, and the resulting DCA+SPX is added as liquidity to generate more fees.