Add agEUR as collateral for Jet Protocol

Collateral Asset Profile

  • Collateral Name (and symbol): agEUR (agEUR)
  • Collateral Short Description: agEUR is a decentralized Euro stablecoin. It is the biggest and the most liquid one in the market. It can be issued from the Angle Protocol in a capital-efficient way and at oracle value using stablecoins like USDC, DAI, FEI and FRAX. The protocol relies on two different types of liquidity providers to make sure the stablecoin remains convertible against collateral
  • Total Value in Circulation: Around $165m
  • Total Value on Solana: Less than $1m, agEUR makes up the first Euro pool on Saber and is looking to actively expand on Solana, thanks to integrations in other protocols like Jet. It’s the first Euro stablecoin on Solana, together with cEUR
  • Price Oracle Feeds: Pyth EUR/USD. agEUR has a hard peg, it is used by other euro stablecoins to maintain their peg on Curve.

Proposal

The proposal is to onboard agEUR on Jet Protocol. Currently most ways to get yield in DeFi are through USD stablecoins. This means that when you are in Europe and your home currency is the Euro you are exposed to a change risk.
Having agEUR as a collateral on Jet would basically allow people to get yield on Euros, but also to get leveraged while caring about the variation of the price they are looking to in Euro.
The stablecoin is infinitely liquid and it can be easily bridged using the Wormhole from Ethereum to Solana, meaning that if there is a high demand for it, people could easily mint in Ethereum, bridge from Ethereum to Solana and take profit from the arbitrage opportunities on Solana

Use Cases

The use cases here are quite obvious:

  • For people using it as a collateral: get yield on Euros and not on dollars
  • For people borrowing it: leverage their volatile crypto to own some agEUR which are stable to get other DeFi opportunities, or swap these agEUR for volatile crypto in order to get leveraged on the Euro variation of the price of the asset they are using as collateral

Official Links

Relevant Metrics

  • Total Value In Circulation: $165m
  • Total Value Locked: $220m
  • Age of Asset: 2 months

Risk

  • Technical Risk: The protocol has been audited by two different audit companies, so there is always a smart contract risk but everything has been done to mitigate it
  • Counterparty Risk: agEUR is backed by USD stablecoins and it is over-collateralized by two kinds of agents: hedging agents opening perpetual futures on the price variation of USD with respect to the Euro and standard liquidity providers over-collateralizing the protocol. In case of protocol failure where agEUR would not be redeemable, the protocol has safety modules it can activate.
  • Liquidity Risk: Liquidity is quite low for agEUR on Solana at the moment but this is being worked on as integrations with protocols help to solve chicken and egg problem.
  • Price Feed Risk: Using a EUR/USD price feed for agEUR could be a bit risky if there came to be price deviations of agEUR on Solana or on Ethereum, but given that agEUR can be minted/burnt at oracle value, this would not last long as arbitrageurs could directly profit from
  • Bridge Risk: agEUR is bridged using the WormholeV2, this induces a small risk for agEUR on Solana
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Since I am a new user, could only post two links in the post, so putting new links here:

The protocol has a 500k bounty open with Immunefi. It has been under two different audits by Chainsecurity and Sigma Prime. Check out our audits here.
The code is open source, check out our Github.

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Angle Protocol blog with detailed research articles about the project
Angle Analytics with data about the project

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Thank you for this thoughtful proposal. I think the liquidity is too low to be considered personally at this point. There’s only $200K in the acEuro-agEuro pool on Saber. And I do not see it anywhere else.

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Hey! Yes it’s true liquidity is low on Solana! But the stablecoin can be easily bridged, so as long as there is demand for it, liquidity could increase.
We’re seeing it on Polygon, where as soon as there is a new incentive pool, liquidity increases by $1-2m immediately. Same happened with Saber, liquidity increased from 0 to where it is as soon as incentives where put.

I understand your point about the low liquidity but given the facility to bridge, I think we should more look at the overall liquidity of the stablecoin across all chains

Hi @sogipec, thanks for posting your proposal! I’d love to keep tabs on you guys as you develop - Seeing the Euro used more widely in DeFi would be very cool.

Do you guys have any plans to incentivize deeper liquidity on Saber, or somewhere else on Solana such as Serum or Orca?

The issue from our side is that in order to list an asset, we need deep enough liquidity for it on the Solana blockchain with a USDC or SOL pair (SOL is permissible because there is deep liquidity for it on many pairs onchain) . This is in order to ensure that we can always liquidate bad debt when we need to do so. So even though there is much more agEUR that can be bridged, we need that liquidity here on Solana in order to move forward with agEUR as a collateral type.

Tl;dr – The health of the protocol and ensuring no bad debt is our primary concern – we would need a way to swap >=$10M (ballpark estimate considering our current TVL of ~$30M) of agEUR for USDC on the Solana chain before we can even consider listing it as collateral.

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Hey Kevin! Thanks a lot for the clear explanation! Yes we plan on pushing for deeper liquidity on Solana, this may take some time though!

Will therefore try to push for more liquidity on our DEX pairs then!

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Hey @K-Jetta! Following up on this! We are not to the point where we have a >= $10m liquidity on Solana, but things have definitely changed since we last spoke about it in December. agEUR now has $3.3m liquidity on Solana, and it has a liquidity pair with USDC on Atrix.

On top of that the token can be bridged at a 1:1 rate through the wormhole so liquidators could still liquidate the token doing some cross-chain stuff.

Was hence wondering if this could still be of any interest to you. With for instance a borrow cap on agEUR so that we can for sure make sure bad debt does not accrue out of it.

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Hey @sogipec, that’s great! We were just discussing implementing borrow caps, so it sounds like we’re on the same wavelength.

Have you seen the collateral onboarding framework?

We’re right on the cusp of releasing the JetGovern app, which will need to vote on new collateral types. In addition to enabling the actual vote by the community, the link I posted above is a very comprehensive guide for the process of having the DAO consider and approve new collateral types. Everything will need to go through that channel.

Take a look at it, try to start filling it out, and let us know what you think! The DAO is also actively looking for people that will be able to help facilitate this process, which would help you in your efforts as well. I hope to keep hearing more from you and your team in the future and hope to see agEUR on Jet in the not-so-distant future!

Thanks for your reply @K-Jetta! Will definitely take a look then!

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agEUR - Collateral Onboarding Application

Hello Jet Protocol team and community! Expanding on @sogipec’s post, here is a full Onboarding Application as per your Teamplate. Feel free to reach out through Discord or reply here for any other information!

Looking forward to see agEUR on JetLend :handshake:

Interested Party Profile

  • Name of Application Author: tuta, from Angle
  • Contact (forum / twitter / email): tuta#3689 on Discord
  • Submission Date: 28/03/2022
  • If endorsed by Jet Community Member, list here: @K-Jetta

Application Profile

  1. What is your motivation for submitting this application?
    We want to expand agEUR on Solana so that it becomes the go-to EUR stablecoin on the network.
  2. What is your association to the proposed collateral?
    Part of the core team.
  3. What are the benefits to the Jet Protocol for onboarding?
    Adding agEUR as collateral on Jet Protocol would allow Jet to add a robust and valuable stablecoin to their protocol. Additionnally, this would make it the first EUR-pegged stablecoin on Jet, opening the market to all Euopean users.
  4. Known limitations of the collateral type:
    Currently, agEUR can only be minted on Ethereum mainnet. However, Angle is planning on developping a debt-based module to enable users to mint agEUR from deposited collateral. This module would be easier to deploy on other networks. You can read more about it here: https://gov.angle.money/t/adding-a-new-debt-based-minting-module/274

Project Profile

  1. A brief, high-level description of the collateral’s native ecosystem (project):
    Angle is a decentralized, capital-efficient, and over-collateralized stablecoin protocol. It started with an innovative model, allowing users to mint and burn stablecoins at a 1:1 rate, while having the protocol reserves hedged by traders through leverage long margined positions.
    It started by issuing agEUR, a EUR-pegged stablecoin, and plan to expand to other stablecoins when the time comes.
    Since launch in early November, agEUR has been the most traded EUR stablecoin on-chain (Ethereum), with more than $500M volume.
  2. Other relevant project data or comments:
    Angle TVL: > $160M
    agEUR Market Cap: > 80M€
    Collateral Ratio: ~165%

Collateral Profile

7. Collateral Name: agEUR

8. One sentence description of collateral:
EUR-based stablecoin with a tight-peg mechanism.

9. How is the applying collateral currently used?
Currently, agEUR is motly used by funds, projects, and individuals as a reserve asset and trading instrument.

10. What exchange(s) support the asset?
Only decentralized echanges for now: Saber and Atrux on Solana, and mainly Uniswap V3 and Curve on Ethereum.

11. Are there any oracles for the proposed collateral type?
Not yet on Solana, but we are in talks with the Pyth team to get it live as soon as possible!

12. List any parties interested in taking part in liquidations for the proposed collateral type:
We know a few that might be interested if this moves forward.

Legal Profile

13. Is the project or the collateral owned by any incorporated organization?
No, it’s not.

14. Has the project or the collateral obtained any legal opinions on the regulatory standing of the token?
Yes, there is a legal opinion stating that the token is not a security.

15. Has the project or the collateral had any legal interactions? If so, describe and provide documentation if possible:
There hasn’t been any yet.

##Links

  • Link to Project’s White Paper: https://docs.angle.money/whitepaper
  • Link to active communities related to the project: https://gov.angle.money/, StakeDAO
  • Link to Project’s Documentation Portal/Source Code for the system(s) that interact with the proposed collateral: https://docs.angle.money/
  • Links to Audits of both Procedural and Smart Contracts:https://docs.angle.money/resources/audits
  • Link to Legal Opinions
  • Links to Other Legal Material: Risks (https://storage.googleapis.com/app-terms/Angle_Risk_Statement.pdf), Terms (https://storage.googleapis.com/app-terms/Angle_Terms_of_Service.pdf), Privacy (https://storage.googleapis.com/app-terms/Angle_Privacy_and_Cookies_Policy.pdf)

Relevant Solana Addresses:

List all relevant Solana addresses here:

  • agEUR: CbNYA9n3927uXUukee2Hf4tm3xxkffJPPZvGazc2EAH1, https://explorer.solana.com/address/CbNYA9n3927uXUukee2Hf4tm3xxkffJPPZvGazc2EAH1
  • ANGLE: 31GpPxe1SW8pn7GXimM73paD8PZyCsmVSGTLkwUAJvZ8, https://explorer.solana.com/address/31GpPxe1SW8pn7GXimM73paD8PZyCsmVSGTLkwUAJvZ8

Marketing / Campaign Material

If you have additional marketing material, recorded discussions, or collateral onboarding campaign material, link here:

  • https://developers.angle.money/
  • https://twitter.com/AngleProtocol
  • https://discord.com/invite/5Af6xum9bc
  • https://blog.angle.money/
  • https://angle.money/
  • https://docs.angle.money/resources/branding

As said at the beginning, feel free to reach out to tuta#3689 on Discord or reply here for any other information!

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Hi Tuta, thanks for taking the initiative to fill out the application as a first step! We’re on the final push of getting the governance app live.

Before a formal proposal is held, there is also a more in-depth risk-related analysis that will need some details filled out. This is currently in the final stages of being finalized and will be posted and announced soon. I am happy to personally lend a hand to your efforts there and will reach out on Discord so we are in touch.

Thanks again for moving this forward – I’m looking forward to the proposal and formal on-chain vote!

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Definitely in support of this proposal! I am a Core Contributor at Angle Protocol as well!
Let me know as well if you need anything else @K-Jetta!

One thing, Angle is expanding into algorithmic market operations, and so we could technically provide several millions of liquidity to the platform for people to borrow cheaply!

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