AIP - 29: Whitelist Yearn voter contract to enable Angle locks into veAngle

AIP: Whitelist Yearn voter contract in Ethereum mainnet to enable Angle locks into veAngle and its benefits: participate in governance voting proposals amd Angle emissions and boost Angle rewards in Yearn’s existing SLP strategies.

Authors: Yearn strategist team

Summary:
Whitelist the Yearn central voter contract (0x3C0aa3f15aFBF289B2e7aC4263237D122A84a644) in the Angle whitelister contract to enable Angle locking into veAngle.

Context:
Yearn has currently 5.5m USDC and 3m DAI invested as a SLP since early May 2022, in order to increase yield for our users, the amount of collateral deposited and participate in governance votes, we propose to whitelist our voter contract to enable Angle locks.
In contrast to other Yearn strategies where rewards are entirely sold, we commit to lock a part of the earned emissions (5-10%) for 4 years to keep increasing the veAngle balance and the boost earned by the SLP strategies.

Proposal:
Approve the Yearn Ethereum voter contract deployed at 0x3C0aa3f15aFBF289B2e7aC4263237D122A84a644 to lock a part of the Angle rewards generated by the SLP strategies in the veAngle contract.

Implementation:
Use the Angle whitelister Admin MS (0xdC4e6DFe07EFCa50a197DF15D9200883eF4Eb1c8) to approve the Yearn voter contract (0x3C0aa3f15aFBF289B2e7aC4263237D122A84a644) in the Angle whitelister contract (0xAa241Ccd398feC742f463c534a610529dCC5888E).

Value to the protocol:
Approving the Yearn voter to lock Angle rewards, would boost the APRs earned by the SLP strategies in the USDC and DAI vaults, increasing the amount of funds allocated to them which increases the collateral backing the AgEUR stablecoin, rendering the system more secure.
Additionally, approving the Yearn voter contract also distributes voting power, making for fairer governance votings.

Risks:
Approving Yearn voter to lock Angle rewards creates a risk of centralizing voting power in the long run if Yearn were to allocate 100% of the Angle rewards continuously to veAngle locks.
The scenario is extremely unlikely as in that case, the SLP strategies would be providing a lower APR which is not sustainable for Yearn as lower APRs would make the users withdraw their funds from the vaults.

3 Likes

More locking by yearn == :handshake:

In support of the proposal as well! Yearn is an important player in the Angle ecosystem so this locker would be a great way to align incentives!

95% of ANGLE rewards dumped is huge. This proposal doesn’t seem to be in the best interest of Angle.

Hey @Tube , thanks for the comment. Take into account that the 5-10% initial lock ratio (set to 10% initially) is the initial number for us to avoid compromising the current yield paid off to users while changing to this new setup.
Once the new setup is in place (proposal has been voted against but to answer your comment), if APRs increase, both the 10% percentage of emissions locked could increase (distributing voting power in Angle) and the liquidity deployed (making the system more secure as the liquidity provided by SLPs is used in Angle as buffer liquidity to cover mismatches between HAs and collateral provided by agEUR holders), both resulting in value for the Angle protocol.