Add Market: agEUR

New Markets
1

Hello everyone,

I am proposing to add agEUR to Compound. I am a Core Team member of Angle and I am hoping to gather some feedback around the proposed parameters and more generally having agEUR on Compound.

Angle Protocol is a decentralized stablecoin protocol, it has launched agEUR, which became one of the biggest Euro stablecoin in the market (and the biggest decentralized Euro). The protocol has gained growing support across DeFi, and it has demonstrated strong partnership with Compound by depositing a large share of its reserves here.

Angle Protocol and agEUR

agEUR can be minted at oracle value from USDC, DAI, FEI or FRAX. The way the protocol insures itself against the $/€ volatility risk of its collateral is by issuing perpetual futures. On top of that, the protocol is over-collateralized by the deposits of another type of agent incentivized by strategies of the protocol (involving lending to Compound).

Collateral ratio of the protocol is currently 153% with a TVL in the protocol of $224m. Average daily volume for agEUR varies between $2m-$20m.

Since its mainnet launch, agEUR has managed to consistently hold its peg with the Euro. It is even used by other Euro stablecoins to keep their peg thanks to Curve integrations.

Liquidity for agEUR exists mostly on DEXes. agEUR has liquidity pools on UniswapV3 ($48m liquidity for agEUR/USDC, $21m for agEUR/FRAX, $12.81m for agEUR/ETH), Sushiswap ($11m for agEUR/ANGLE) and Curve ($130m). The stablecoin can be minted in a capital-efficient way at oracle value from the protocol meaning liquidity for it could be theorically infinite as demand grows for it.

agEUR is available on multiple chains (Fantom, Polygon, BSC, Harmony, Fuse, Solana, NEAR) but can only be natively minted on Ethereum mainnet.

agEUR does not have a Chainlink feed yet, but it passes all the requirements for it, and so it only needs one big protocol to ask for it to get the feed.

Why agEUR and Benefits for Compound

Many DeFi users are looking for a way to get yield without having to care about the Forex risk. If you’re in Europe and depositing USDC on Compound, you may end up losing money at the end of the year if $ decreases with respect to the Euro. Listing agEUR on Compound would open the gates for many institutional players coming to get yield on their €.

On top of that, many agEUR holders are looking for a reliable place to deposit their stablecoins and get a simple yield on this on mainnet: Compound would provide this use case.

We could expect borrowers of agEUR to be people wanting to either take advantage of the different yield opportunities provided by LPing agEUR or by people wanting to get leveraged on another asset while being exposed to the € price of it (and not the $).

Overall, the inclusion of agEUR will allow agEUR and Compound’s dedicated and robust communities to increase their exposure and utility!

Audits and Security

The protocol has gone through three different audits (two with Chainsecurity and one with Sigma Prime). Audit reports are available here.

Angle Protocol also maintains an active bug bounty program which offers up to $500k for critical vulnerabilities to the smart contract.

The protocol has been assessed by Curve Core Team when it tried to get a gauge, you can check the report here.

Other Technical Aspects

Governance Structure

The Angle protocol is governed by its DAO and more particularly by veANGLE token holders (ANGLE holders which locked their tokens). The way governance proposals are made is that a Snapshot vote takes place and results of it are implemented (if positively voted) by a 4/6 multisig comprised of 3 Core Team members (2 doxxed and 1 anon), Julien Bouteloup, SebVentures (from Maker) and 0xMaki (from Sushi)

Upgradeability

agEUR token contract on mainnet is upgradeable and can be upgraded by the multisig described above.

The whole protocol can be paused by a guardian multisig composed of Core Team members.

Social Channels

  • Discord: 31.5k members
  • Twitter: 25.9k followers

agEUR Contract

  • Total Supply = Circulation Supply: €128.4m
  • 24h Volume: On average between $2m and $20m, as of the 23rd of February: $2.4m (without taking into account Curve pools)
  • Price Volatility: Sub 1% per day
  • Date of Deployment: Oct 23rd 2021
  • Number of Transactions: 2405 transactions and 16580 transfers
  • Number of holders for token: 489 (NB: there are many incentive programs involving LPs of agEUR which means actual amount of holders is higher)
  • Insurance: Insurace

Proposed Parameters

  • Collateral factor: 0%
  • Borrow cap: 5M agEUR to start with
  • COMP borrow/supply speeds: 0
  • Interest rate model: Same as DAI
  • Reserve factor: 20%

References

1 Like
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---- I am also a Core Team member of Angle ----

This is a great added value proposal for Compound as it allows to create a completely new market, which will extend Compound reach to European markets. Personally, I am more inclined to deposit on an Euro stablecoin than on a dollar one. It would reduce entry barrier, as I would have less uncertainty on my yield (as @sogipec said, by lending Dollars I have to be long dollars from a European standpoint). IMO uncertainty is what limits adoption as your revenue optimisation is more complicate.

Accepting a reliable stablecoin like the agEUR, will let enter Compounds even more users.