AIP - 4: Strategic Partnership with Stake DAO

Angle Improvement Proposals
1

Status: Proposition

Specification

  • Request to whitelist Stake DAO to lock ANGLE via a locker (locking ANGLE as sdANGLE for boosts).
  • Formalise partnership between Angle Protocol and Stake DAO with a D2D token swap. The proposed token swap conditions are swap SDT & ANGLE tokens in tranches of $100k every 2 weeks using 3-day TWAP prior to each swap until the total value of the swap equates to $500,000.

Overview

The contributors of Stake DAO and Angle Protocol have been actively supporting one another through code reviews, business development, and marketing for the past few weeks and months. The intention has always been to test our collaboration and determine its validity before presenting potential benefits to the respective communities.

We are delighted to present this proposal to the community as we believe that the benefits are clear and at this point propose to formalise working relationships between the two DAO’s with a token swap and whitelisting of Stake DAO to lock ANGLE tokens.

If whitelisted Stake DAO can release its Locker for ANGLE to create sdANGLE (veANGLE locked by Stake DAO) and provide boosted strategies built on top of Angle Protocol products e.g. agEUR/ibEUR Curve Pool.

We also request authorisation from the community to pursue an official partnership between Stake DAO and Angle Protocol formalised with a D2D token swap. The proposed token swap conditions are to swap SDT & ANGLE tokens in tranches of $100k using 3-day TWAP prior to each swap every 2 weeks until the total value of the swap equates to $500,000.

If you’re unfamiliar with Stake DAO, you can read and follow the links shared immediately below to equip yourself for the decision. Skip this section and go to #Rationale if you’re already familiar.

What is Stake DAO?

Stake DAO is a multi-chain protocol offering the most optimised risk-adjusted returns in DeFi. > At the time of writing, platform TVL is $800,000,000 across Ethereum, Avalanche, Polygon, and Staking-as-a-Service nodes.

Stake DAO is whitelisted on Curve and Frax and has excellent relationships with both protocols, creating mutual value and synergies.

All data is available for review on our dedicated analytics site here. In addition, all historical strategy performance and contracts are public on our Web App here.

Rationale

What are the D2D synergies?

The need for a Euro Stablecoin in DeFi is clear, and Stake DAO had supported Angle protocols efforts to service that need even before writing any code. The Angle team invited us to ideate with them as they created the protocol, and we supported their implementation choices.

Our commitment is demonstrated through our help in code and enabling the Angle team to leverage our resources and network to fulfill their needs. For instance, most recently, Stake DAO utilised its veCRV to vote for a gauge for agEUR/ibEUR pool (can verify at the link below).

We also have a significant presence on Frax and can actively use our strategic positioning here to increase the usage of agEUR.

Stake DAO has lending solutions and strategies across Ethereum, Avalanche, Polygon, and Harmony, with further releases to follow. The Stake DAO and Angle teams are actively building features that enable Angle protocol to impactfully leverage this cross-chain presence to increase the usage of agEUR and other Angle assets.

Why would I lock my ANGLE on Stake DAO rather than Angle Protocol?

  • Dramatically increased incentives by combining ANGLE rewards, Stake DAO performance fees, and SDT to lockers. (1.5-3x or greater).

  • Stake DAO locker provides access to boosted yield on agEUR strategies. This means users can access boosted yield on all strategies that leverage agEUR without ever locking any ANGLE. The attractive yield this provides means more liquidity into strategies leveraging agEUR thereby helping Angle protocol to grow. The Stake DAO strategies leveraging agEUR are designed to incentivise Farm & Earn behaviors rather than Farm & Dump, giving the user choices (auto-lock, stake and boost, sell) on a granular basis & incentives for actions such as stake and boost that help the protocol.

  • Locking ANGLE with Stake DAO entitles you to additional rewards in SDT and a share of protocol performance fees

Suggested Voting Options

  1. Whitelist and D2D swap
  2. Whitelist only
  3. D2D swap only
  4. Amend/resubmit the proposal
6 Likes
2

link to SD vote supporting agEUR/ibEUR gauge

2 Likes
3

Locking Angle in a locker instead of individually is an inevitable outcome, leading to bigger rewards for those who commit and yet through locking externally stakers also enjoy flexibility in the form of sdAngle.
Furthermore collaboration with stakeDAO leads to further entanglement - pun intended - of the protocol which is key to Angle’s success.
I’m also for the D2D swap because I believe it is important Angle retains some sway over platform movements; upholding a longterm vision instead of seeking short-term profits that might bottleneck platform growth (especially agEUR needs continued growth in volume and employment).
Hence option 1.

[edit: I did not consider if StakeDAO is the best platform for Angle to collaborate with! I solely agree that a collaboration with a platform to achieve a similar outcome is due]

1 Like
4

For context our locker (code under audit, released soon and shared w Angle team already) is fundamentally different to a “flywheel” type of locker that extracts governance power from the underlying.

This is an advantage as against the existing/legacy solutions out there.

Another aspect is that although SDT for now is just used for protocol governance, is yield bearing and unlocking yield bearing nft’s, the upcoming deployments will place holders of SDT (particularly DAOs) in a significantly more advantageous position wrt the above (boosted yield, yield bearing also (but better) and have governance power).

5

I’m against this proposal unless much more favorable conditions are provided on the Angle StakeDAO pool. Their usual default fees are in the range of:

  • 15% performance fee
  • 0.5% withdrawal when exiting the pool (calculated on the entire deposited amount and regardless of the time you leave your money there)
6

Thanks for the post @hatashi !

As @Derek_McGabe pointed out, it’s just a matter of time before a locker protocol releases on top of ANGLE. Having it done by Stake DAO with who we have a great relationship is even better!

As most people should know from Convex design, this would allow ANGLE holders that are not LPs to lock their tokens into sdANGLE and share their boost with LPs on Stake DAO, who in turn would share part of their rewards to sdANGLE holders.

I think one point that could be detailed is how would Stake DAO’s veANGLE voting power would be redirected. Would sdANGLE holders be able to propagate their votes to the veANGLE gauges in some way? Or would SDT holders retain this?

Edit: In favor of this D2D swap which would allow the synergies between both protocols to grow, and make even more sense in the case of Stake being whitelisted!

7

thanks for your comment, not sure where your info came from but it’s really important to be precise so here are the exact params which can be checked on all deployed strategies.

Should be noted that the existing strategy we deployed for Angle USDC has no withdrawal fees, only 15% performance fees on earnings. Performance fees are redistributed to SDT holders and to Lockers.

Lockers e.g. sdAngle

  • There are no fees on lockers, whatsoever
  • The majority of performance fees from strategies are redistributed to users that lock into the lockers e.g. ANGLE into sdANGLE.
  • Bribes directly to those that hold and vote with sdANGLE
  • Voting rights are with users that hold sdANGLE

Strategies e.g. Autocompounding vault for agEUR/ibEUR Curve Pool

  • 15% performance fees on earnings (redistributed to sdANGLE holders and SDT holders)
  • No withdrawal fees

Old strategies

  • 15% performance fees on earnings
  • 0.5% withdrawal fees on earnings

All rates shown on our UI are after fees.

You can verify this all in code, on our UI, the Stake DAO analytics site and on etherscan directly

8

SDT influence is still a bit opaque: “majority of performance fees are distributed to sdAngle holders”. What goes to sdAngle holders and to SDT holders respectively in percentages? (and are there more distribution targets to consider?)

Do voting rights remain fully in the hands of sdAngle holders or are SDT holders to be considered as well in some way?

9

Thanks for this initiative.

How would I transfer my veANGLE into the Stake DAO Locker? Will Angle transfer them? I can’t see them in my wallet so I assume that Angle as custody of them. ELI5 please!

Thanks

(I’ve looked in the Angle Discord and can’t find an answer)

10

100% of the Locker’s voting rights (Angle Protocol governance + gauge allocation on Angle protocol) remain for sdANGLE stakers.

Indeed as you identified, some sdANGLE will not be in the sdANGLE staking contract but in the Curve factory pool (ANGLE/sdANGLE), the veANGLE voting right represented by staked sdANGLE will therefore be strictly superior to 1.

As a baseline on average, 1sdANGLE vote > 1 veANGLE vote as users stake into the Curve Factory pool to capture incentives (SDT, possibly CRV).

On top of this, but on top of this, voting right will be boosted by the number of veSDT held by each user (same boost formula as the veANGLE boost one).

In a very extreme case, if a sdANGLE staker has no veSDT while all other stakers benefit from maximum boost (max veSDT locked), and Curve factory pool has nearly 0 liquidity, the minimum vote held by this sdANGLE staker would be > 0.4 veANGLE.

This is a very extreme case, and is already much better than any other existing lockers. On average the simulations show people with no veSDT to have around 0.8 veANGLE voting right while people with max veSDT boost will have more than 2.5 veANGLE vote per sdANGLE staked.

11

Do voting rights remain fully in the hands of sdAngle holders or are SDT holders to be considered as well in some way?

  • 100% of the Locker’s voting rights (governance + gauge allocation on Angle protocol) remain for sdANGLE stakers.

SDT influence is still a bit opaque: “majority of performance fees are distributed to sdAngle holders”. What goes to sdAngle holders and to SDT holders respectively in percentages? (and are there more distribution targets to consider?)

  • There won’t be any withdrawal fee in the strategies released. There will only be a 15% performance fee and up to 1% harvest fee automatically distributed to various addresses at every harvest as follows:
  • 8% of claimed rewards redistributed to the respective locker/strategy (aka a majority)
  • 5% for veSDT holders
  • 2% to cover DAO costs and sent to DAO treasury
  • Up to 1% to the harvester

to clarify further the main points are governance and rewards, you can find a breakdown below.

Governance

  • The sdANGLE holders retain full voting rights over Gauge incentives and Angle governance (same as veANGLE but in a liquid token).
  • veSDT retain voting rights over SDT incentives and Stake DAO governance.
  • veSDT lockers gain boost on gauge votes for all sdLockers (see comment above).

Incentives

1. Rewards for locking ANGLE into sdANGLE

  • Native APR in ANGLE (e.g. veANGLE APR% with autocompounding w/o end-user gas cost)
  • Share of 8% of strategies performance fees
  • The ability to sell voting rights of the underlying asset (in this case veANGLE)
  • Additional SDT incentives

no fees charged

2. Rewards for users in Stake DAO Angle Strategies

Stake DAO builds a strategy on top of ABC/agABC Curve pool to autocompound rewards and collect swap fees from Curve.

  • Native APR from swap fees (e.g. ABC/agABC base APR%)
  • Earnings APR in CRV decided by CRV gauge voting (veCRV + yCVR + sdveCRV + cvxCRV)
  • Earnings APR in ANGLE decided by ANGLE gauge voting (veANGLE + sdANGLE)
  • Earnings APR in SDT decided by veSDT voting
  • Incentives APR in bribes provided by platforms that want Angle gauge votes for ABC/agABC Curve pool

fees: 15% on earnings, these are redistributed to sdANGLE lockers and veSDT

12

in the first phase of roll-out of the locker we’ll be focussing on ANGLE, in the next phase we will release our solution for veANGLE currently under development.

If implemented this is good news for veANGLE lockers as they can benefit from the network effects similar to how veCRV benefitted from yCRV, sdveCRV and finally cvxCRV.

13

Ok thanks

I guess I was confused by this extract from the proposal which mentioned veANGLE

If whitelisted Stake DAO can release its Locker for ANGLE to create sdANGLE (veANGLE locked by Stake DAO) and provide boosted strategies built on top of Angle Protocol products e.g. agEUR/ibEUR Curve Pool.

14

Thank you for all the explanations @hatashi
It’s quite an important vote so we need to understand all it encompasses well.
A few more questions…

  1. I think it’s pretty clear, but I need it said just in case. veSDT holders enjoy a boosted sdAngle vote. But this only applies to the vote and not the staking rewards right? So not a boosted sdAngle yield and most important: not a boosted yield when staking in strategies (as this would suffocatingly siphon veAngle rewards to veSDT)
  2. sdAngle voting will be done synchronized to Angle, a weekly cast?
  3. which Angle strategies will be employed, or if unclear as of yet what is the basic idea of what we can expect when it comes to strategy offers.

Thanks agaiN!

15

Thanks for the clarifications!

Leaving full voting rights to sdANGLE holders is a big competitive advantage. As you point out, the voting boost from veSDT holders will have an impact over the distribution of these voting rights.

Taking into account the good relationship between both teams and the potential SDT voting power to Angle’s DAO if the D2D swap happens, I have no doubt that veSDT holders will keep the best interest of the protocol and the agEUR at heart, and remember that Angle is a stablecoin protocol first!

I’m eager to see the impact of this new locker design on both Angle and Stake DAO once/if it sees the light :handshake: