Hi everyone,
This is a proposal to move the current liquidity seeded by Angle Protocol in a Uniswap V3 agEUR-USDC pool on Arbitrum from Uniswap to KyberSwap.
Context
Angle Protocol previously deployed agEUR on Arbitrum and seeded liquidity on Uniswap V3 to allow better liquidity on Arbitrum for the agEUR token.
Arbitrum representing one of the significant Layer 2s both in terms of TVL and user base, it is important for the protocol to sustain its development efforts on such chain.
Deep and efficient liquidity is a prerequisite to further developments and integrations in the Arbitrum ecosystem.
Considering that Kyber Swap is a DEX with features comparable to Uniswap V3 (concentrated liquidity, multi-chain) and charging fewer fees to the benefit of the DEX, Angle has ben considering moving its Arbitrum liquidity from Uniswap to KyberSwap.
In addition, the recent progression of KyberSwap’s TVL on Arbitrum and potential incentives to be distributed to liquidity providers support this proposal to move the agEUR Arbitrum liquidity to KyberSwap.
Proposal
The proposal is to move the entire liquidity seeded by Angle Protocol in its Arbitrum Uniswap V3 agEUR-USDC pool to KyberSwap.
The TVL to be moved approximately amounts to ~490k.
It is proposed that the amount moved to KyberSwap be divided into two equal amounts of agEUR and USDC to be deposited in a KyberSwap pool.
Implementation
The liquidity deposited by the protocol in this Uniswap V3 agEUR-USDC pool on Arbitrum will be moved to KyberSwap and the tokens will be, if necessary swapped to reach a 50/50 distribution of agEUR and USDC in the new pool to be seeded on KyberSwap.
Value to the protocol
Moving Arbitrum liquidity from Uniswap to KyberSwap will allow Angle liquidity to further develop on Arbitrum as it will be deployed on a platform that has an active development on Arbitrum and is willing to provide incentives to agEUR liquidity providers in the form of its native tokens $KNC.
The platform also presents several features similar to Uniswap that make it an acceptable replacement choice with the advantage that a higher proportion of fees are distributed to liquidity providers.
Risks
The risks this proposal bears are the following:
- The standard risk of LPing: Impermanent Loss and variation of the underlying tokens. This risk is quite minimal as it’s a agEUR / USDC pair
- As Kyber is more recent than Uniswap and less battle-tested, the smart contract risk is significantly higher. Informations to consider are:
- the code has been audited by ChainSecurity, see audit report
- TVL is currently > 80 million, which is a safety guarantee as for these kind of amounts it has for sure already gain attention from hackers
- There seems to be no bug bounty program
- A hack on their frontend occurred in September
- According to Kyber’s team, there is no admin privilege over the funds so the risk of rug pull is minimal
Please comment below with any input you may have. The suggested amounts and ranges chosen can be discussed and amended according to community feedback.