This is just an idea, I don’t know whether I should directly put it in proposal. As a disclaimer, I am a Core Contributor in the Angle Protocol
The following is a proposal to allocate a portion of the protocol controlled FEI into the Angle Protocol. The idea would be to use FEI to mint some agEUR within the Angle Protocol, then use these agEUR and some other FEI to bootstrap an agEUR/FEI pool in a DEX pool like Sushiswap or Uniswap. Angle governance could vote to incentivize with ANGLE tokens LPs of this pool.
The Angle Protocol is another decentralized stablecoin protocol, that has just launched a Euro stablecoin backed for the moment by USDC and DAI, but that could be backed by FEI. It has gained more than $100m TVL in its first 3 days (not as outstanding as FEI but still)
Angle Protocol has just launched its Euro stablecoin, and it is seeking to expand the collateral types that could be used to mint it. FEI as a collateral is one option (cf this proposal: AIP - 2: Accept FEI as a collateral for the Euro stablecoin - Angle Improvement Proposals - Angle Community). To mark FEI’s commitment to this expansion proposal, it might be worth, if FEI becomes an accepted collateral, allocating some of the protocol controlled FEI to issue some agEUR and bootstrapping a FEI/agEUR pool.
I think that this typically falls into the scope of why the FEI LaaS program has been built for: using protocol controlled FEI to build partnerships with other protocols and create additional use case for the FEI stablecoin.
This would also diversify the protocol’s controlled liquidity to some Euro positions. This is interesting given the volatility of the dollar with respect to the Euro and could give a hedge in case of big USD inflation.
As mentionned in Angle’s governance proposition, LPs of the FEI-agEUR pool could be incentivized with ANGLE tokens. This would give another source of revenue for the protocol and for FEI holders.
Angle Protocol has also strategies built on top of its reserves. Incentivizing Angle to use FEI as a collateral could be a smart way to leverage FEI’s AAVE integration: Angle could deposit its protocol controlled FEI into Aave redistributing the yield to its liquidity providers with a multiplier effect compared with that obtained by simply lending to Aave. In short, this makes Angle as a sort of Yearn for FEI which is definitely interesting for the protocol: people could earn yield on FEI without having to care much about gas fees thanks to Angle.
The Angle team will be there to help with the process each step of the way and assist with setting everything up. If the community has any questions or feedback, we would love to hear from you!