Disclaimer: I am an Angle Core Team member
This is a proposal to switch agEUR oracle to a lower tier pool. Currently, agEUR liquidity with wETH is on a 30bp pool.
There has been a proposal which was successfully voted by Angle governance to migrate this liquidity to a 5bp pool.
While Euler oracle relies on agEUR/wETH oracle, it is essential to coordinate to perform this migration and this is why I am writing this proposal here
Angle incentivizes liquidity on the UniV3 agEUR/ETH pool with ANGLE tokens. In fact, it’s G-UNI tokens (ERC20-wrappers) that are incentivized. The flow is that people add liquidity to Gelato, which adds to Uniswap, and in exchange people get an ERC-20 token which they can stake in Angle Staking contract.
As Angle Staking contract is community-governed, a governance operation can be used to pull the G-UNI tokens from the contract, withdraw liquidity from the 30 bp pool, add it to the 5bp pool and get a new G-UNI token out of it, which is then sent back to the upgraded staking contract.
We have coded at the Core Team a contract to perform these operations atomically in a single transaction.
Angle Protocol also controls a significant portion of the full-range liquidity of the pool. Gelato liquidity is constrained between certain ticks.
To make sure that Euler and Angle coordinate on this, what I propose is to perform the following successive actions:
- Angle Protocol migrating 1/2 of the full-range liquidity of the 30 bp to the 5bp pool.
- Euler changing the pool used for agEUR
- Angle performing the liquidity migration described above
- Angle moving the rest of the full-range liquidity to the new pool
All of this could take place in just a few hours, as roles would have already been granted on the Angle side prior to asking to the Euler community to switch the oracle reference.
This has been thought to completely eliminate the risk of attacks during the process of oracle migration. Full-range liquidity will be kept at all times and on all pools.
In advance, thanks for bearing with the Angle community voting to change pools which are incentivized. Rationale behind it is to make agEUR one of the most easy to use stablecoins in the market.
We could imagine people taking advantage of low tx fees on agEUR to get leverage using Euler: like lending ETH, borrowing agEUR, swapping agEUR for ETH. This could work with any of the long tail assets of interest for Euler.