AIP - 10: Kill FEI related gauges

1

Hey everyone,

This is a proposal to kill the following FEI related gauges:

  • UniV2 agEUR-FEI
  • FEI-EUR perps
  • sanFEI_EUR

Context

FEI protocol and the Tribe DAO has been one of the longest standing partner of the Angle Protocol. They have provided useful liquidity for agEUR, and on our end they’ve been a collateral of agEUR. Owning FEI in reserves helped the protocol make substantial revenue for SLPs and veANGLE holders.

In details, the Tribe DAO has provided 10m FEI to the protocol to mint ~
9m agEUR and used this liquidity to provide agEUR-FEI liquidity in UniV2.

Recently, the Tribe DAO has been thinking about simplifying their protocol controlled value and removing their agEUR from the protocol.

Proposal

In the wake of these changes, since there will no longer be any agEUR minted from FEI after they burn their agEUR, we propose to kill FEI related gauges to stop distributing ANGLE inflation to things that no longer add value to the protocol.

The idea is to stop sending ANGLE rewards to the following gauges: UniV2 agEUR-FEI, FEI-EUR perps and sanFEI_EUR.

Value to Angle and its users

If all the agEUR minted from FEI are burnt, then all FEI-related perpetuals will be force closed. There could be arbitrages where someone mints a small FEI amount then opens a perp and gets all the ANGLE rewards voted for this gauge.
The protocol could end up incentivizing perps too much to hedge something that has gotten really small in this situation.

The same goes for sanFEI_EUR holders: they are help to make the agEUR minted from FEI more secure, but if no agEUR is minted from FEI, then there’s no need to incentivize with ANGLE tokens this kind of positions. sanFEI_EUR token holders would still be accruing rewards on the yield strategies implemented by the protocol.

Last, Tribe DAO is one of the sole LP of the UniV2 agEUR-FEI pool: if they’re removing their liquidity, there will be incentives in place for no liquidity, and we could use these incentives to increase liquidity on other crucial pools like agEUR-USDC.

In short, removing these gauges would make sure that ANGLE inflation goes to what’s most valuable to the protocol, and that rewards go to what will make the protocol best grow.

Implementation

This would be a first time that the Angle protocol kills a gauge.

To do this, the governance multisig needs to call in the AngleDistributor contract the toggleGauge function.
This means that rewards voted on this gauge will simply not be distributed.
This allows people voting for these gauges to switch their votes when they want to, their votes will not be taken into account in the distribution process and in the meantime overall ANGLE emissions may slightly be reduced.

Like if there are 3% of the ANGLE emissions that should go to these gauges because of the leftover votes, then once they are killed and if votes are not moved: 97% of the ANGLE emissions will be sent to the other gauges, and the remaining 3% voted will simply stay in the contract for the corresponding week, and it won’t result in increased emissions in the future.

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I’m 100% in favor of this, and I think we probably need to look at all of our gauges and remove inefficient ones. I’m looking at agEUR/ibEUR pools and the 3EUR pool. Not to get too off topic, but Fixed Forex is basically a dead project right now, so no use in incentivizing it. As for 3EUR, we are basically subsidizing EURT and EURS with this pool. I would much rather just have a agEUR/EUROC curve pool instead, as EUROC is a much superior collateral than EURT or EURS, and would require more agEUR for the same pool size.

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Thanks for your answer. Agree on the agEUR/ibEUR and same for the 3EUR. I am going to create a governance discussion with the opportunities and how we can best leverage EUROC at Angle. Idea would be to have a base pool on Curve and start being the Forex pillar of their infrastructure.

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