This is a proposal to grant a portion of the protocol’s surplus ($300k) to the Core team to diversify the DAO’s treasury and acquire some tokens protocol tokens to help the growth of the protocol.
Angle has made a surplus of $8.5m since its launch. As stated in this proposal, while it’s important to keep a portion of this surplus in the protocol as a safety net, the protocol has enough margin (with the current agEUR total supply) to use this surplus and invest it in other places.
It’s also good to have the “invested” part liquid to be able to pull funds if needed in case of a black swan events.
Many discussions recently took place to allocate a portion of this surplus to buy other tokens to facilitate incentives given to agEUR holders in different places of DeFi.
This proposal is about granting the Core team a budget of $300k from the surplus to buy tokens of other protocols.
This pocket will not be used directly all at once, it’s more an allocation that can be used little by little as soon as attractive opportunities.
Advantage of voting this allocation prior is that acquisitions by the Core Team will not be frontrunnable by other stakeholders monitoring Angle votes.
Idea is to never perform acquisitions of more than $100k, and to submit to a vote each allocation greater than that size. Each acquisition will be reported to be tracked transparently.
Goal is to start with a $20-40k EUL acquisition. This will allow the protocol to vote for agEUR gauge to incentivize borrowers to come and pay a yield to agEUR lenders (e.g the protocol with its AMOs).
In the roadmap, we could also use this allocation to buy CRV or CVX tokens as well.
This will enable the protocol to gain influence among other protocols and create flywheel effects for agEUR holders. We can imagine a situation in which the protocol votes for pools, and makes even more revenue thanks to its votes (like what could happen on Euler) in a similar way to what FRAX did on Curve.
The main risk with token investment is the protocol losing money on its investments due to decreased token prices and not being able to create the desired flywheel effects with the token purchases for agEUR, in which case the surplus would have been decreased.
Investments are risky but if well calibered the rewards could offset the risk, and the risk-adjusted returns could far outweight the cost here.