Summary
This is a proposal to support agEUR (biggest decentralized € stablecoin by Angle Protocol) as collateral and loan currency on Radiant to onboard Euro users on Radiant and provide a venue to earn lending yield or borrow a Euro stablecoin on Arbitrum. A debt ceiling may be applied according to the Radiant’s risk assessment.
References
- Project - https://www.angle.money/
- Documentation Portal - https://docs.angle.money/overview/readme
- Github - https://github.com/AngleProtocol
- Audits - https://docs.angle.money/resources/audits
- Discord - https://discord.gg/awmufyPa
- Twitter - https://twitter.com/AngleDevs
- Angle Analytics - https://analytics.angle.money/#/home
- agEUR Dune Dashboard - https://dune.com/tuta/ageur
Motivation and Rationale
With the addition of agEUR as collateral and loan currency on Radiant, we want to service funds, and individuals users looking to borrow or find utility for the agEUR they hold, and attract agEUR holders and all Euro seekers to Radiant as a preferred lending platform on Arbitrum.
The € stablecoin is a pretty under-served market at the moment in DeFi. Many DeFi users are coming from Europe and want to get a yield on their home currency without being exposed to a USD/EUR change risk. Supporting agEUR on Radiant would open the gates for many institutional players coming to get yield on their €. On top of that, Radiant would be the first money market platform to support agEUR on Arbitrum.
Having a € stablecoin on Radiant would also enable the protocol’s users to long their collateral against the Euro and short the Euro at the same time. The Forex rates have recently been quite volatile and with agEUR as a borrowable asset, people could start taking advantage of Radiant to play in this market, even with leverage.
Overall, the agEUR token is the Euro stablecoin with the most volume and this volume has increased steadily since its launch. Radiant would be benefiting from this increasing demand and onboard the cohort of users coming with it.
Specifications
Initially launched on mainnet in November 2021, Angle is a decentralized and over-collateralized stablecoin protocol.
The protocol has launched agEUR, a Euro stablecoin, which has become the biggest decentralized Euro stablecoin. The TVL in the Angle Protocol is $57m with >32m agEUR in circulation.
agEUR is also the most traded Euro stablecoin on-chain and the most integrated across the Defi ecosystem.
Advanced fiat on/off-ramp:
agEUR offers multiple on-ramp and off-ramp solution for crypto traders to easily access stable cryptocurrencies and support the expansion of decentralized finance. agEUR is readily available for buy through Transak, MtPellerin and Wert. The team is continuously working to improve and multiply secure on/off-ramp options.
Ultimate Transparency:
agEUR is consistently overcollateralized up to ~150% (see Protocol Design section below) and and detailed and illustrated analytics on the protocol and its reserves are publicly available on https://analytics.angle.money/#/home.
Angle Protocol has been audited by Chain Security, Sigma Prime, and by 3rd party independent auditors. The protocol scored the highest security and quality appreciation (97%) by Defi Safety: https://www.defisafety.com/app/pqrs/482.
Protocol Design
There are different mechanisms (also called modules) by which agEUR can be issued all having in common that agEUR must be released on the market in an over-collateralized way.
- In the Core module of the protocol, agEUR can be minted from USDC, DAI and FRAX at oracle value. The protocol insures itself against the $/€ change risk by issuing perpetual futures and by relying on the deposits of another type of agent (Standards Liquidity Providers) incentivized by the strategies built by the protocol and by transaction fees. agEUR issued from this represents the biggest share of the agEUR in circulation, and they are consistently over-collateralized at more than 150%.
- The protocol also has a borrowing module where agEUR can be borrowed against different assets depending on the chain (ETH, wBTC, wstETH, LUSD, MAI, AVAX …) similar to Dai from Maker DAO. It is this module that is deployed on Arbitrum (with for the moment: USDC, wBTC and wETH as collateral assets).
- The protocol is also engaged in what is called direct deposit modules that allow it to mint agEUR in specific places. It has for instance minted agEUR natively on Aave and on Euler. In these cases, agEUR enter in circulation when they are borrowed in an over-collateralized way on the corresponding protocol. The protocol also mints agEUR on the agEUR-EUROC Curve pool when this pool has more EUROC than agEUR (like what FRAX is doing).
agEUR is an ERC20 token backed by reserves composed of USDC, DAI, FRAX, WETH, and WBTC.
In terms of security, Angle Protocol has been audited by Chain Security, Sigma Prime, and by 3rd party independent auditors. The protocol scored the highest security and quality appreciation (97%) by Defi Safety. It has also been assessed by Curve team. The Protocol has bug bounties running on Immunefi and Hats.finance.
Governance
The agEUR contract on Arbitrum is upgradeable. Only protocol related contracts have minting rights on this contract, and so there’s no multisig or EOA that can directly mint agEUR at the moment.
Like in any decentralized protocol, only governance can vote to change the contracts, add new parameters or collateral assets, update minting rights.
Technically speaking, votes for such changes are done on Snapshot, and then implemented on-chain by a 4/6 multisig composed of 3 team members (Guillaume Nervo, Picodes, Pablo Veyrat), and 3 reputable people in the industry (Julien Bouteloup, 0xMaki and SebVentures).
Bridges
As a cross-chain protocol, agEUR on Arbitrum are not only tokens that are natively minted through the Borrowing module, but there are also bridged tokens.
The protocol is based on an innovative bridge setup built to enable a nice UX for bridging agEUR while preserving super high security standards, enabling the protocol to resist any kind of big bridge hack. This setup is fully described here.
One of the solution supported to bridge agEUR to Arbitrum is LayerZero. So far, very few agEUR have been bridged to Arbitrum with LayerZero (with respect to the total amount of agEUR in circulation), as can be tracked on this dashboard.
The security bridge setup of the protocol is built around global and hourly limits. If LayerZero was to be hacked the protocol would lose around 50k, which is far less than the surplus of the protocol worth as of today around $8m
Other Considerations
The Angle protocol can be interacted with directly from the smart contracts, or on an app built for this hosted here. This app is not an official app of the protocol (there are none), it’s an app developed by Angle Labs, Inc. a company contributing to the protocol.
The Angle Labs team has implemented a US geolock on the app as a safety protection for the app, even though there is nothing that would necessitate blocking US persons at the protocol level. To some extent, interacting with Angle is like interacting with Maker to get some DAI, here as the Angle Labs team is based in France, so it chose to put the geolock.Related to the protocol as well, there are legal opinions on agEUR not being a security.
Steps to implement
This request for proposal is sumbitted for discussion and assessment by the Radiant DAO, including assessements relating to a potential debt ceiling.
On Angle’s side, if this proposal passes, we will put forward a proposal on the Angle governance forum a proposal to seed the pool with some agEUR (at least 10k $agEUR to start and then ramp up), and hence support the launch of the agEUR money market on Radiant. This should give first borrowers the guarantee that there is enough liquidity and kickstart the first network effects
Timeline
The proposed timeline for this integration is to be determined, based on the governance process of Radiant.
Overall Cost
This integration will mobilize team and work efforts on both Radiant and Angle side. On Angle side, there would be no specific cost for the potential initial seeding, and on Radiant side, processus for new collateral assets seems streamlined such that development efforts required for agEUR which is liquid on 1inch should be minimal.