[DRAFT][GF: Phase 1 Proposal] Angle

Angle Incentive Proposal

Last edit: 13/06/2022

Project Name: Angle

Author Name: @tuta

Number of OP tokens requested: 500,000 OP

L2 Recipient Address: 0x3245d3204eeb67afba7b0ba9143e8081365e08a6

Targeted deployment date: By the end of July 2022

Relevant Usage Metrics: (TVL, transactions, volume, unique addresses, etc.)

  • Angle TVL ~$120M
  • agEUR total supply > 60M €
  • agEUR daily transaction count > 100
  • agEUR weekly DEX volume > 30,000,000 agEUR
  • agEUR total transfer volume on-chain > 5B agEUR (includes all types of transactions)

More info on our analytics and on this agEUR dashboard. You can also check out Angle’s app on mainnet at app.angle.money

Optimism alignment (up to 200 word explanation)

Angle was launched on Ethereum first because of its strong network effect, and the long-term alignment with its vision and values. We see Optimism as a very promising rollup for its scalability, but also for its will to pursue the Ethereum vision of decentralized public goods. The governance experiment being put forward by the Optimism Foundation is a testimony of that.

Angle is a decentralized and over-collateralized stablecoin protocol that launched agEUR, the leading decentralized EUR stablecoin on Ethereum. We are preparing to launch a new set of smart contract called Angle Borrow. It will work alongside the current mechanism, and will add the ability to mint stablecoins from assets deposited in a vault similar to Maker’s DAI mechanism.

This will allow us to expand the protocol and its stablecoins to new layers and sidechains, including Optimism. This is an opportunity of Optimism to have access to a robust and over-collateralized stablecoin that has been stress-tested on mainnet already. Angle is also planning on launching other stablecoins in the future.

Proposal for token distribution (under 1000 words)

  • How will the OP tokens be distributed? & How will this distribution incentivize usage and liquidity on Optimism?

    • 80% to be distributed to agEUR LPs in a pre-defined and linear way to incentivize early liquidity on Optimism.
    • 10% to be distributed to agEUR LPs periodically to incentivize specific partnerships on Optimism between agEUR and other actors
    • 10% to be kept by Angle DAO to align incentives between the protocol and the Optimism, and involve Angle DAO in governance right from the start. These tokens could also be used to provide liquidity to an OP-agEUR pool.
  • Why will the incentivized users and liquidity remain after incentives dry up?

Optimism and other L2s are the leading scaling solution for Ethereum. Angle & agEUR community today is mostly on Ethereum and we think they share the vision of the Ethereum rollup-centric future. They know the security advantages of using Optimism compared to another L1 fork.

We believe that incentivizing Angle users to come to Optimism will be a winning operation, as they are likely to come for the rewards and stay for the quality of the network. At the same time, this will help Angle grow and bring utility and liquidity to Optimism through agEUR and its capital-efficient contracts.

A thriving stablecoin ecosystem is very important for any network, and this is what Angle will bring to Optimism. Borrowing stablecoins and getting leverage in the protocol are two native use cases in DeFi that can survive without being incentivized. Bootstrapping the use of Angle and agEUR with network incentives is a good way to attract the first users before reaching a critical size.

  • Over what period of time will the tokens be distributed:

Over 3 to 6 months.

  • How much will your project match in co-incentives?

Some ANGLE tokens of the weekly distribution are being set aside for this type of incentives programs. If the proposal passes, the DAO will discuss and vote about how much incentivizes to distribute on Optimism, with the goal being to match OP distributed with ANGLE 1:1.


We hope the Optimism community will welcome Angle. Let us know if you have any feedback on the proposal, and feel free to leave a comment!

4 Likes

A few questions about this proposal:

When do you plan to offer your dApp on the Optimism Network?

For your liquidity incentives, would it be possible to target Mainnet LPs specifically in order to incentivize a migration of positions to Optimism?

As currently written, the suggested OP token distribution provides ranges and does not add up to 100%. Would it be possible to add clarity to this before it is voted on?

Leaving OP tokens with the DAO does not ensure that the tokens will be used to incentivize usage and liquidity. I would be opposed to that inclusion.

3 Likes

Thanks for your questions.

I added the estimated deployment date of July 2022 to the post. It could very well end up being August.

I also specified the distribution, and lowered the DAO share from 20 to 10%. The goal here is to align incentives between Angle and Optimism by having skin in the game and involving the DAO into Optimism governance.

If the Token House don’t think this is the right way to do so, then we can distribute everything as incentives.

1 Like

Rewarding LP pools is useless and drives temporary and fake adoption. I don’t see remotely how this proposal will drive adoption of Optimism.

It drives adoption of Optimism (or any network really) in that it brings users and liquidity to the network.

As we have seen multiple times, this helps a lot with growth but usually attracts mercenary capital that leaves once incentives dry up (i.e. “fake adoption” indeed). However I think those LPs leave for two reasons: 1) believe the tokens they are farming are worthless, and/or 2) they don’t believe the network in question has the chance to get more adoption than any other competitor.

If you believe these LPs think that for Optimism, then I agree Optimism shouldn’t distribute OP incentives to LPs. Personally, I believe what I shared in the message above and hope it’s true:

If you have any other alternative to drive Angle & Optimism adoptions together, feel free to share it here.

The problem with liquidity incentives is that they are generally unsustainable and projects need to find new ways to grow and bring liquidity rather then needing liquidity incentives which when they run out the projects dies off.

Yes, I bet a lot of the liquidity getting pulled is because people farm worthless projects. The problem though is there is always another project on the same network which will be providing liquidity rewards or a higher APR. So when your project runs out of rewards they will just jump over to the next project and your liquidity will dry up.

I wish all the project focusing mostly on LPer incentive see your comment and understand that LP incentive will not last. Once the incentive is gone, users will be gone too because they came for the reward.

2 Likes

To be honest I think Angle will have a somewhat unique value proposition for Optimism users once it’s deployed there.

It will be (I think) the first borrowing based stablecoins protocol on Optimism, issuing agEUR so a EUR-pegged stablecoin. It will also be one of the cheapest way to borrow stablecoins and get leverage on-chain.

Thanks to Optimism lower fees, the minimum debt size will be lower than on mainnet, opening the app and its use cases to smaller borrowers.

Since this proposal is basically encouraging LPs of Angle assets, could you provide more details (do you have any draft?) About which DEXs (and ranges, if applicable) do you plan to encourage liquidity? agEUR with other EUR Stablecoins (sEUR, EURT), or with USD Stablecoins? What is your priority here? Do you also plan to encourage a pair with ETH, OP or your own governance token, ANGLE?. Thank you

Sure. This will likely end up being voted by veANGLE holders on Snapshot, but I think these are the most natural pools to incentivize for Angle, agEUR, and Optimism:

  • agEUR-USDstable and/or agEUR-EURstable
  • agEUR-ETH
  • agEUR-OP

I don’t have any specific distribution preference between each of those pools though. Maybe a little bit more on ETH and OP ones to compensate for IL?

Ethereum mainnet deployment

By the way, we have deployed the Angle Borrow contracts on Ethereum mainnet, and they are accessible from our new app.

This is what would be deployed on Optimism.

Docs: Borrowing Module Overview - Angle Docs
Developers docs: Architecture Overview - Angle Dev Docs (addresses can be found here)
Github repo: GitHub - AngleProtocol/angle-borrow: Smart contracts for the Borrowing module of the Angle Protocol

1 Like