AIP-3: Accept FRAX as a collateral for the Euro Stablecoin

Angle Improvement Proposals
1

Status: Proposition

Following the proposition to accept FEI as a collateral for the agEUR stablecoin. The logic here is the same: it would make sense to accept new collateral types for Angle to diversify risk and still use different collateral types.

FRAX has been super impressive in the past months. Not only have they been able to consequently grow their liquidity, but they have been able to consistently maintain peg since their launch, and their protocol has proven to resist adverse market conditions especially in May.

FRAX also has some advantages which make it suited for our use case:

  • it has a Chainlink oracle feed and some high liquidity Uniswap V3 pools
  • it is integrated with Aave
  • they have a carefully thought liquidity mining program where they allocate FXS tokens based on votes in the gauge (like Curve system). By submitting a proposal in their DAO, they could for instance incentivize a FRAX/agEUR pool
  • and most of all, they are alined with our vision of making fully decentralized stablecoins, and could thus be a super valuable partner for the project

Each stablecoin induces a new risk, so we may at launch cap the amount of stablecoins we can issue using FRAX to a factor like 40m. This factor could then increase

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I agree with you. It’s great to associate with a highly decentralized, dynamic program.

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I have nothing more to add, it is all summed up. Frax would be a most welcome addition to the protocol!

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Given FRAX team high reputation, this is definitely the right move.

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