• Title: ANGLE-EUL DAO to DAO Swap

  • Author(s): Pablo Veyrat (Angle Protocol core team member)

  • Related Discussions: Allocation of DAO treasury to agEUR

  • Submission Date: 27th of July 2022


This is a request for comments for a $100k ANGLE-EUL DAO to DAO swap.


About Angle

If you’ve already read this proposal, you can switch this section.

Angle is a decentralized stablecoin protocol, responsible for the issuance of agEUR, the biggest decentralized Euro stablecoin.

agEUR is one of the main assets on Euler with 6.45m supplied and 1.7m borrowed on the platform.

It is based on an over-collateralized protocol (current collateral ratio = 220%). agEUR can be issued from different means and across different modules:

  • there is a core module which allows to mint agEUR from USD stablecoins at a 1:1 rate: the protocol hedges itself against the EURUSD change risk by issuing perpetual futures and it relies on other depositors (called standard liquidity providers) in addition.

  • agEUR can also be borrowed against other assets (like wETH, wstETH, wBTC) in a way that is similar to what Maker is doing with DAI. Liquidations were inspired by Euler’s cutting-edge liquidation mechanism

  • The protocol can natively mint agEUR in different places and protocols if the ways these agEUR enter the market are guaranteed to be over-collateralized. To this extent, 3.6m agEUR were minted on Euler and there’s been a governance vote that guarantees that borrow interest rate will remain < 3%.

agEUR has consistently held its peg since its launch, TVL of the protocol is $83m and the protocol has accumulated a safety net of around $10m since its launch.

agEUR is so far the most traded Euro stablecoin on-chain and it has full range liquidity controlled by the Core team on Uniswap on its UniV3 ETH-agEUR pool.

Protocol is obviously audited and got several independent reviews from independent contributors like this one.

About Angle and Euler

As mentioned above, Angle has the opportunity to mint agEUR on Euler, and has so far minted 3.6m agEUR on the platform. The lending yield goes to the protocol which should distribute it as some point to veANGLE holders.

Angle indeed has a ve-tokenomics and distributes a portion of the revenue it is making to veANGLE holders, that is to say ANGLE token holders that have locked their tokens for a length ranging between 1 week to 4 years. veANGLE tokens are currently paying a 30% yield to holders.

We’re currently working on a contract similar to what Maker is doing on Aave with the D3M that should enable us to automatically mint as soon as the borrowing yield is getting too high.

Overall strategy on the Angle side is to make Euler a central place for agEUR lending and borrowing, and to take advantage of Euler’s key features to facilitate FOREX trading in DeFi (this is the sense of the proposal we have already posted).

Relations between Angle and Euler can be really synergistic in that sense.


To facilitate the synergistic relations between Angle and Euler, we’re proposing here a $100k DAO to DAO swap between Angle and Euler DAOs.

Idea is that Angle will be able to stake the EUL tokens to vote for the agEUR gauge and encourage people to borrow agEUR on EUler. While the Euler DAO would be making revenue on the borrows (reserve factor), with the obtained ANGLE tokens it’d be possible to earn an additional revenue when algorithmic market operations revenues from Angle are distributed to veANGLE holders.

Euler DAO could be whitelisted to own veANGLE tokens.

This would also allow Euler to vote for the gauges of their choice (like G-UNI agEUR-ETH) to direct ANGLE emissions in places that could reinforce the agEUR oracle used for Euler.

Last, this would also enable the EUL governance to diversify its treasury and gain overall voting power in other DAOs.

Specification and Implementation

For the TWAP, we could use a 7-day VWAP data from Nomics for the ANGLE and the EUL token.

1 Like

I am inclined to want to support this proposal given the existing synergistic relationship between the DAOs, and the amounts are small enough that the risks are modest. However, I’m stuck on two things:

  • The benefits of the swap seem time-asymmetrical, to Euler’s disadvantage. Euler would need to lock the received ANGLE for an extended period of time to earn any revenue from Angle’s operations, whereas Angle would be free to move its EUL at any time. I get that it currently makes the most sense for Angle to park its EUL on the agEUR gauge, but it’s not beholden to that decision for up to four years like Euler would be if it wants to maximize the benefits of a veANGLE position.
  • What does it mean that Euler could be “whitelisted to own” veANGLE? Is vote-locking of ANGLE a permissioned process? What are the criteria for interested parties to be allowed to lock their votes in Angle’s voting escrow contract?

Finally, EUL is already more distributed than ANGLE as a fraction of the total supply, so the dilution behavior of the tokens is asymmetrical, again to Euler’s apparent disadvantage. Maybe this doesn’t matter, but I think it merits noting.

Thanks for the comments!

  • I get the asymmetry when it comes to the voting power and the need to lock in Angle’s case. One thing worth noting is that there exists a liquid locker from StakeDAO built on top of Angle, where you can get 1 sdANGLE for 1 ANGLE and hold the same voting power as 1 veANGLE. Usually, voting power with sdANGLE tends to be better than veANGLE since you get all the power from sdANGLE who forget to vote.
    Other solution to reduce the asymmetry could also be to have the Angle DAO put its EUL tokens in a multisig with Euler DAO team members so that it’s sure that the EUL tokens are not sold.
  • Vote-locking ANGLE is a permissioned process for smart contracts, it’s permissionless for EOAs. Usually for DAO’s multisigs, getting whitelisted is super straight forward since it gives the same power as you’d have with an EOA.
  • As for the EUL token being more distributed, I’ve been struggling to find EUL circulating supply, but when it comes to the ANGLE total supply, the emission schedule of a portion of a tokens is still uncertain, so it’s probably going to take years or even decades for everything to be unlocked.
1 Like

I will vote against this proposal. I don’t like this proposal; this will affect Euler’s price negatively while Euler will be left holding a token that is reducing in value.

I am strongly against this proposal. A DAO <-> DAO swap of this size does not significantly align incentives, especially at Euler’s size. Without a detailed investment proposal mentioning cashflow, what products Angle is building out, etc. there is no reason for Euler DAO to purchase $100k of ANGLE.
For example, this proposal does not mention where veANGLE’s yield is coming from. Is Angle Protocol currently bringing in revenue equivalent to 30% (or 18% as of now) of veANGLE marketcap annually? I doubt it.
It’s also not Euler’s job to be paying for agEUR liquidity as suggested by

This would also allow Euler to vote for the gauges of their choice (like G-UNI agEUR-ETH) to direct ANGLE emissions in places that could reinforce the agEUR oracle used for Euler.

Not to mention the veToken system mentioned by @allthecolors .
Gaining voting power in other DAOs is great, but $100k of voting power is too small to be worth Euler DAO’s time managing.
A combination of low incentive alignment, lack of protocol analysis, and time management costs makes me hope that this proposal is revised to be more mature.