AIP - 46: Add new collateral assets to the Borrowing module


This is a discussion to start accepting new collateral assets for the Borrowing module across different chains. A less funny topic than gold but still worth discussing!

On Ethereum:

On Arbitrum:

On Optimism:


Angle recently added support for productive assets earning a yield as a collateral for agEUR with Convex and Stake DAO FRAXBP as the first supported assets for the token.

As demand has been quite high for borrowing from our first LP token, it may be time to consider adding support from other assets, especially on other chains since the protocol is built to be chain agnostic.


The proposal is to add the collateral assets mentioned on Ethereum, Optimism and Arbitrum.
Note however that it is at this point more a discussion on whether these assets should be supported by the protocol or not.
As discussions evolve, we’ll update the proposal with more detailed parameters (collateral factors, LTVs and so on for each).


With the work that has been done for FRAXBP launching new assets should be very straightforward. The idea is to use exactly the same infrastructure and smart contracts as what exists for FRAXBP.

Value to the protocol

Angle will offer people a way to easily get a leverage on these tokens providing on average a >3% APR.
It’s important to note that users getting leveraged through this medium are not EURUSD neutral and doing so, they’re essentially shorting the Euro and increasing their exposure on the dollar, so to offset for this risk, it makes sense to add assets as a collateral that can offer a pretty high yield (while still being liquid)

There are very few protocols building on top of the proposed assets, so this gives extra flexibility to people who own these LP tokens but cannot do anything out of it: typically, they’ll be able to borrow agEUR from tokens already earning a yield, and earning some incentives with agEUR.


There are some important risk considerations to have in mind when adding support for a new LP token as a collateral.
The first one is that the price of the LP token shouldn’t be manipulable. This implies having for each of the assets in a pool a Chainlink feed, which is the case for the 4 pools proposed.

Underlying tokens should all have some liquidity with agEUR, which is something that is verified for each of them. We’ll propose debt ceiling parameters and collateral factors accordingly with liquidity for each of the tokens.

It’s also important that liquidity for a token in the pool does not lie solely on this pool: for instance if you’re having as a LP something like LUSD-3CRV and the only LUSD is in this pool, then it becomes risky to use the LP token as the value of LUSD is already dependent on the pool.

In the end, it’s all a matter of how you can liquidate such assets used as a collateral. Liquidation infrastructure will be the same, and so liquidators will easily be able to tap into the proposed contracts to unpack a LP token to agEUR in a single transaction.
On top of that, it’s going to be key to setup the risk parameters (debt ceiling collateral factors) to reduce to the maximum possible the risk of bad debt for the protocol.

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I think you should add new collateral assets tbh


The next step is to define the parameters used for these 6 new collaterals. You can see my proposition in this PR.

They are relatively close to the parameters used for FRAXBP, but with a higher maximum discount on LUSD3CRV and 2CRV (Arbitrum) as both underlying collaterals could be less liquid than FRAXBP underlying tokens.

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