Potential Proposal: Putting some FEI in the Angle Protocol

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

Basic Summary

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)

Motivation

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!

7 Likes

More partnerships for FEI are always good, and hedging away from pure USD allows for additional PCV stability. This also adds an additional usecase for FEI with the incentivized Angle pool. In favor.

1 Like

In favor of this as well! I’ve met many of the Angle development team and they are competent and have a unique go to market strategy.

This would be different from LaaS as FEI would be exposing itself to the agEUR but this is fine because Euro volatility is low.

In exchange for the risk Fei protocol is taking on, it should be compensated with Angle tokens on an ongoing basis in the form of liquidity mining. Assuming that condition is met I am in favor.

  • In favor of Angle liquidity partnership
  • Not in favor of Angle liquidity partnership

0 voters

1 Like

I’ve tried Angle from their Testnet and I think it will be very cool to use Fei as collateral on Angle

First of all, congrats for the launch! The Angle protocol design is very interesting.

The trade between EUR/USD is huge in TradFi, so there is a lot of potential in DeFi for it.

It is a good start for a partnership between two projects that has decentralization as a priority.

I support this proposal considering the the incentives with ANGLE tokens like the other Angle pairs have.

If AngleDAO establish a limit for Fei as a collateral, I would prefer that our Angle allocation did not use all this limit, but something up to 50%.

Another point, could we consider supplying FEI-agEUR to Balancer?

1 Like

For the ANGLE allocation, this would be something the DAO will have to decide, but it would have to fall within the scope of Angle Liquidity Mining Program.

As for FEI-agEUR to Balancer, any AMM could work for Angle DAO provided that there is an ERC-20 for that

Please provide more details on this, as this is an important component of the proposal that would allow the Fei community to make a fully informed decision.

I think for now UniV2 makes the most sense until we start migrating to Balancer in earnest

Yes sure no problem. The release schedule of Angle Liquidity Mining program can be found here: Angle Liquidity Mining Program - Google Sheets

Basically each week ANGLE tokens are distributed to different pools involving agEUR, and governance can decide how and where to distribute these tokens.
A total of around 3,000,000 tokens (which at current unstable for ANGLE is $260k per week). We could imagine that above 10% of this allocation will be going to the agEUR-FEI pool which would make at current rates $26k worth of ANGLE distributed each week to LPs of this pool. Depending on the liquidity in the pool, this could increase

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Following the last comment from @sogipec, there is currently ~3M tokens distributed each week, made to incentivize the liquidity where it stands !

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Should be about 5% APR at 20MM of liquidity (half FEI), not counting swap fees. If it goes well can consider petitioning for more of the gauge for more liquidity.

Should make sure the pair is on the uniswap default swap list for the router.

1 Like

Yes sorry so I miscalculated in my post, so it’s $3m distributed each week so we could easily reach the 5% threshold

1 Like

Moving this proposal to last call, and affecting to number FIP-45.

I propose to create a snapshot vote with the following parameters :

  • Spend 10M FEI to mint agEUR
  • Deposit agEUR on Uniswap-v2, along with 10M matching FEI
  • Stake the ~20M$ of agEUR-FEI Uni-v2 LP tokens to earn ANGLE rewards
  • Use of Chainlink’s EUR-USD Oracle for agEUR
  • Maximum tolerance of 1% fee/slippage to mint/burn on Angle and deposit liquidity on Uniswap
4 Likes

Snapshot is live :slight_smile: