[REVIEW][GF: Phase 1 Proposal] Angle Protocol

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

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Hey everyone,

Pablo from Angle Protocol and co-author with @tuta of the Angle Incentive proposal.

I’d like to give some updates about the state of Angle incentive proposal.

Angle Project Update

First on Angle and Optimism. The protocol was just deployed on Optimism: it is now possible to borrow agEUR for 0.5% a year on Optimism against ETH and USDC.
New collateral types can easily be added so we could technically support OP for instance.
Everything happens here and the smart contract addresses can be found here.

To start creating flywheel effects, the protocol has seeded a $400k pool with USDC and agEUR on Velodrome and acquired 2m VELO tokens (for $90k) locked for a period of 4 years.

agEUR is therefore a liquid Euro stablecoin on Optimism, and it’s now easy and super cheap to get leverage on ETH or on USDC through Angle protocol on Optimism thanks to the seeded agEUR liquidity.

Updates on the proposal

Number of OP tokens requested: 250,000 OP
We propose to reduce the number of requested OP tokens from 500,000 to 250,000, and leave us the room to apply again for 250,000 additional OP (or what’s necessary then) when we have more evidence of our success.

TVL on Optimism: Official announcement has not been made yet but 200k agEUR have already been brought to Optimism, and the protocol has already committed more than $500k to the Optimism ecosystem.

How will the OP tokens be distributed?

Based on community’s feedback on the proposal, especially about the fact that LPs can be mercenary.
Following up on @tuta’s comments, growing liquidity is essential for Angle product to be attractive: otherwise there’s no point in getting leverage on agEUR, and we’ll slowly and smoothly decrease OP rewards so that in the end APY comes mostly from fees of people using the pool to sell agEUR to get leverage or to buy agEUR to repay their debt.

What we propose as well is to amend the reward smart contracts to propose a lock to LPs: idea is that LPs which are locked for a certain amount of time (up to 1 year for instance) receive more rewards than those that do not lock.

On top of that, to make the distribution clearer, what we propose is the following:

  • 80% for agEUR liquidity on Optimism (spread between Velodrom - agEUR/USDC to start with- and Curve)
  • 20% for bounties and teams building on top of Angle on Optimism

Over what period will the tokens be distributed

1 year

How much will the project match in co-incentives

The project has already bought some VELO tokens to incentivize liquidity on Optimism. We will keep voting for our Optimism pools with these tokens and make sure that VELO rewards are higher than OP rewards distributed to LPs. Based on the different token prices, we may include some ANGLE rewards to make sure there’s always more than 1$ of non-OP reward for each OP reward that’s distributed.

On top of the incentives, should the proposal be successful, we propose to facilitate the adoption of OP on Angle protocol and facilitate the introduction of OP as a collateral to mint agEUR.
Angle low interest rates (0.5%) would be the smallest ones possible for people to borrow against OP.

This will allow among other things OP holders to mint stablecoins against their OP (rather than having to sell it) or to get leverage on their tokens (using the agEUR-OP liquidity we would be building).

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If it was just deployed on optimism. I’d recommend coming back in a couple weeks to see the usage of the protocol.

There are some great incentives here, and we appreciate that you have utilized the community feedback to adjust your OP request, but we believe it’s better to apply once the protocol has been alive for a while.

Definitely, will do then and thanks for your reply! Also might work well in terms of timing since next round will only start on the 8th of September.
TVL at the moment is $900k on Optimism by the way.

It will be a good idea for the Angle Protocol to re-apply a proposal in voting cycle #6, the Angle Protocol is launched on Optimism, (in that term mentioned in this proposal),

the governance funding is aimed at incentivizing projects launched on Optimism, and such incentivization would contribute to the growth of Angle as well as the growth of the Optimism ecosystem.

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Definitely support this! Love CDPs and Angle is a + for the Optimism community

If they get an OP grant, we can also partner with MAI to make a bigger splash on liquidity capture

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Thanks for the support @Benjaminqidao !

We are coming back for voting cycle #6 now that Angle has been deployed on Optimism!

The app can be used here to borrow agEUR against OP, USDC, and wETH.

You can also check out the analytics (by selecting Optimism on the top right corner), and all the contracts deployed on the rollup.

There are potentially some interesting partnerships coming with Angle on Optimism with Gamma, QiDao (MAI), and Liquity (LUSD).

Let us know if you think the proposal is ready to move to voting for Cycle#6!
@Bobbay_StableNode @OPUser @diligit

Ps: I created a dedicated thread on the new Discord channel.

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Hi @tuta Thank you for the tag.

Few things:-

  1. change the proposal template to latest one.
  2. in the new template summarize the feedback you have got so far.
  3. once new season starts, first week is for community feedback so I assume we will see more engagement here from the community. At the end of first week, summarize all the feedback again on the proposal for delegate/committee feedback in second week.

Please find more on the new process here

Exciting! USDC is cool and all, but what about minting agEUR with MAI :star: :eyes:

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Thank you for the input!

I just updated the proposal, and added DeFi Committee Group C as reviewers.

If understood correctly, schedule should be as follows:

  • Community feedback until September 15th
  • Delegate feedback until September 22nd.
  • Voting until September 28th.
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FWIW: Angle Protocol’s to acquisition and max locking veVELO (4y) demonstrates to me that they are making a long term bet on the Optimism ecosystem and that this isn’t just about a short term liquidity boost.

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We also support Angle Protocol’s grant request. They have their own ve-token model that aims to keep LPs invested even after the OP rewards are gone, and they’ve shown themselves to be a top notch team that can deliver.

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Hey everyone,

Community feedback looks great overall!

Looking forward to hear your final thoughts @OPUser @Dhannte @DeFi_LATAM_Joxes @MinimalGravitas @ScaleWeb3 .

As always, let us know if there is anything.

Thank you for the tag. I just notice that you have assigned this proposal to Defi Committee C, ideally it should be just DeFi Committee.

Thanks, just updated!
Moving the proposal to [REVIEW].

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Hey @OPUser , @ScaleWeb3 and others!

Is the proposal finally ready to be moved to a vote?

If I remember correctly you have up until today to consider the proposal to be ready for voting in this round.

Hey @tuta Thank you the tag.

From defilama, your number to token request is quite high compared to TVL on OP but you have a good TVL on mainnet even in this bear market so with the incentives you might be able to bring some liquidity. I am afraid that most of tvl will be farmers but may be few will stay.

Could you provide details on distribution, weekly/daily/day and pair you are targeting

Also, do you have any KPI ? goal that you want to achieve ?

On co-incentives, I dont think buying token of other project is a co-incentives. What are offering as part of your proposal, that is a co-incentive.

The daily/weekly distribution would entirely depend on the number of pools we incentivize.

Getting OP tokens would help us change our Optimism pools. For now, agEUR/USDC in on a volatile Velodrome pool. With OP tokens as incentives, we could move agEUR/USDC to UniswapV3 where liquidity could be much more efficient. Here, additional incentives could be offered to users leveraging Gamma (cc @BP_Gamma) to provide their liquidity.

At the same time, we are thinking about creating two new volatile Velodrome pools that would be incentivized with OP tokens:

  • agEUR/ETH
  • agEUR/OP

This would provide more liquidity to OP, and strenghten agEUR liquidity on Optimism. This is helpful for users wanting to get leverage on their OP tokens through the Angle Borrowing module, one use case that we expect to be especially demanded when the bull market comes back.

KPIs

In terms of KPI, this is pretty straightforward for Angle: growing 1) the number of vaults on Optimism, and 2) the agEUR total supply on Optimism.

By going into more details, with 200k OP (80% of 250k) of incentives distributed linearly over 6 months, $5M of TVL would be receiving an APY of 8% at current prices. This should be enough to bring around $2-3M of agEUR on Optimism on a stable pool.

Co-incentives

In terms of co-incentives, once again we have tokens set aside (5% of the weekly distribution) that could be voted to be distributed as co-incentives on Optimism. As there is no liquidity for ANGLE there yet, this would require to setup a bridge similar to agEUR and build liquidity there, but it is very possible!

It would make ANGLE available to smaller users.

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Hi, thank you for the updated proposal!

A EUR stablecoin is a great value-add to DeFi & Optimism and we generally like the possibility of using (shorting) the EUR in DeFi (vs. other USD-denominated stablecoins).

Appreciate the qualitative analytics and first traction on Optimism since June, the demonstrated long-term move into the Op ecosystem with locking veVelo, and thinking of optimal liquidity usage on Velo / Uni.

250K Op seems to be a reasonably large amount for the size (marketcap) of Angle & the planned Op distribution over 6 months - mainly focusing on agEUR liquidity which is essential for agEUR usage.

We agree, moving (some if not all) token liquidity to l2 should be beneficial for almost all projects as transaction costs don’t eat up purchasing power & execution generally moves up the stack.

Co-incentives would make the proposal much stronger and accelerate growth on Optimism. Why can only 5% be distributed to Optimism as co-incentives? Is that a changeable, votable protocol parameter?

(We only have 0.4% of votable supply and can’t give you a formal approval to move to Snapshot voting.)

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Thank you for your comment @ScaleWeb3 !

In terms of co-incentives, I should have pointed out that we used $90k of the protocol funds to buy and lock VELO to incentivize agEUR pools with VELO tokens. We plan on keep that going, and be split between the different agEUR pools co-incentivized by OP! This can be seen as co-incentives originally coming from Angle protocol reserves.

The 5% of the distribution is what is set aside weekly for temporary programs such as this one. The rest of ANGLE incentives are voted by veANGLE holders on mainnet and distributed between the different gauges. Adding a gauge is a significant process (vote by the DAO + contract deployment), especially when tokens need to be distributed on L2s. Though it is not impossible, the goal of a gauge is definitely not to be temporary which makes it unlikely in this case. Sorry if it may seem uncooperative, but I wouldn’t want to leverage something that I can’t ensure later on.

However, adding an ANGLE gauge could make total sense in 6 months if we get this first pocket of tokens approved and it appears interesting for both Optimism and Angle to continue and reinforce the program!

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