Hello,
This is a proposal to restart ANGLE incentives following the same inflation rate to what has been set during the Euler hack.
Context
On the day after the Euler hack, in order not to lure people into a stablecoin that was about to depeg, the governance multisig set the ANGLE inflation rate to 0, meaning no new ANGLE tokens have been issued since the Thursday 16th of March that followed.
As the protocol got refunded by Euler, and as it is about to restart (if it has not by the time this is voted), it makes sense to relaunch ANGLE incentives for the protocol.
These have globally been useful for the protocol to gain in traction, attract liquidity, and acquire some integrations. Growing a stablecoin like agEUR is basically a matter of finding solutions to the chicken and egg issue: no one will use the stablecoin unless other people use it. ANGLE incentives are a mechanism that can help overcome some of these issues.
This is not an end, and more a means to an end. Here, as the protocol has taken a reputational hit with the hack, launching incentives is not only going to be a way to attract new people, it’ll also reward remaining stakeholders of the protocol.
Proposal
Proposal here is to re-launch ANGLE incentives but with less gauges than before the Euler hack. We suggest to only keep the following gauges:
- Uniswap V3 agEUR-USDC 0.01%
- Uniswap V3 agEUR-ETH 0.05%
- Curve Incentives
- Sushiswap agEUR-ANGLE
- Polygon agEUR-USDC 0.01%
This implies killing the following gauges:
- sanUSDC
- sanDAI
- sanFRAX
- Curve agEUR-ibEUR
- Curve 3EUR (this one was directly sending rewards to the Curve pool)
There have been discussions on how to best take advantage of the learnings of the situation to build a better protocol. In this governance post, we shared our vision for a V2 of the Core module of the protocol, in a system that does not involve SLPs.
To this extent, while the Standard Liquidity Providers strategies can easily be re-launched within a short time frame and hence SLPs be rewarded for their liquidity, these are less central in the vision we are supporting for the protocol, around agEUR and stablecoins more generally.
When it comes to the inflation rate, suggestion is to put the rate to what it would have been if incentives had not moved. This can be found in this document, and this makes a rate of 2.141752792 ANGLE tokens issued by second
Implementation
This proposal can be easily implemented by calling the toggleGauge function in the AngleDistributor contract. The function setRate also offers rate adjustments.
It’s important to note that it’s possible to keep votes on gauges that have been killed, but that this results in a lowered ANGLE inflation. For instance if 10% of the veANGLE voting power is on SLP gauges and these votes are not removed (they can be removed at any time), then total ANGLE inflation will not be 2.141752792 tokens per second, but 90% of it.
Happy to hear any feedback on this! This seems like an important proposal to have executed, probably not before this Thursday but probably before the one after.
