New Market Addition: Euro Coin (EUROC)

New Markets
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Hi Compound community!

We are Gee Chuang and Linda Dong from Circle (creator of USDC). We recently launched Euro Coin, Circle’s new euro stablecoin that, just like USDC, is fully reserved and always redeemable 1:1 for euros – and we’re excited to bring this to the Compound community! Below is our proposal to create a new market for Euro Coin – we welcome any and all feedback.

What is Euro Coin?
Euro Coin (EUROC) is a euro-backed stablecoin issued by Circle under the same full-reserve model as USD Coin (USDC). Designed for stability, Euro Coin is 100% backed by euros held in euro-denominated banking accounts so that it’s always redeemable 1:1 for euros.

Circle holds euros at regulated, leading financial institutions, beginning with Silvergate Bank in the United States. Grant Thornton LLP issues monthly attestations of Euro Coin reserves, starting with an attestation for the month of July 2022 (we just launched Euro Coin today, on June 30!). Circle’s financial statements, which include the Euro Coin reserve, are audited annually and filed with the SEC.

DeFi Ecosystem Benefits
Circle’s mission is to raise global economic prosperity through the frictionless exchange of financial value. We developed Euro Coin with the goal of increasing access to opportunities to trade, earn, pay and build on a euro digital currency.

We believe the utility and value that a trusted euro stablecoin can bring to the DeFi community is massive – and that for too long, this has been an underserved gap. The total circulation of all euro-denominated stablecoins is just $129 million, which is only 0.08% of the $153 billion that represents dollar-denominated stablecoins. In comparison, the total circulation of all euros is €1.6 trillion, compared to $2 trillion in dollars.

By providing a trusted, gold-standard euro stablecoin, we want to help Compound help the broader crypto community. We want to help this community unlock transformative benefits for DeFi: to easily move euro liquidity on-chain to serve new markets and use-cases, to improve multi-currency digital finance on-chain, and to enable near-instant foreign exchange (with 24/7 execution availability) – to start.

Ecosystem Partners
Since Euro Coin only launched earlier today, we’re working to get EUROC trading pairs live on exchanges, including Binance.US, Bitget, Bybit, FTX, and Huobi Global. We’ve seeded Uniswap and Curve EUROC/USDC pools, and DFX has already created their own EUROC/USDC pool. To further support Euro Coin distribution, we’re also working with Anchorage Digital, CYBAVO, and Fireblocks on the custodian side, and with Ledger and MetaMask Institutional on the wallet side.

Initial Market Parameters (Open to Suggestions!)
Collateral Factor: 0%
Reserve Factor: 25%
COMP Rewards: None
Borrow Cap: None
Interest Rate Model: USDC (Stablecoin Standard)
Price Feed: Chainlink (Details Below)

Price Feed (Open to Suggestions!)
Since Euro Coin only launched today, we’re proposing creating this market using Chainlink’s EUR/USD price oracle. We can later move to using EUROC-specific price feeds as on-chain liquidity improves.

We’re here to participate, to share, and to support the crypto and Compound community. Let us know your thoughts!

References

14 Likes
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Adding EUROC to the Compound protocol is a great idea. We will first need to incorporate EUROC into the compound chainlink oracle (see here for context).

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I also think this is a great idea, which also opens compund for “real-world” currency exchanges.

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I think EUROC is a strong candidate for addition to Compound, but it does seem like the market may still be too immature to support onboarding (even as just a borrowable asset).

There’s only around 1,250 EUROC available to purchase on decentralized exchange, and it seems that minting of EUROC is not available to retail users (website indicates it can only be minted through transfers via Silvergate Exchange Network account, which by my understanding is not available to individuals).

Can you share more about plans for increasing DEX liquidity, as well as exchange integrations and retail accessible mint/redeem functions? Particularly interested in ability to mint/redeem EUROC for US retail users. Thanks!

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I would be very interested to know if there is any change on this front at all to launch a comet for EURC (previously EUROC) on Ethereum?

There is much more EURC available on decentralised exchanges compared to over a year ago when this was first analysed. I’d expect that the market on Compound will be much smaller than that for USDC, however it would certainly add to the use case for those in the Eurozone to use Compound using their native currency or for those who would like exposure to the Euro.