AIP - 75: Launch stEUR on Gnosis Chain and Arbitrum

Angle Improvement Proposals
1

Hello,

This is a proposal to activate the stEUR contracts on Gnosis Chain.

Context

The stEUR contract has already been deployed at the same address across different chains.
Yet so far, it is only activated on Ethereum mainnet, meaning only stakers of agEUR on Ethereum mainnet can take advantage of the yield that’s proposed here.

Having stEUR live on Gnosis Chain (just like any other L2 or sidechain) means that it’d be possible for agEUR holders there to stake their agEUR and start receiving the savings yield provided by the protocol with limited gas fees.

Proposal

This is a proposal to activate the stEUR contract on Gnosis Chain, follow the same rate policy as what is currently supported on Ethereum, and generalize this cross chain rate policy and methodology for stEUR for every subsequent deployment of the stEUR contract on another chain.

This means that the stEUR rate should be the same across all chains where it is deployed (starting with Ethereum and Gnosis Chain here with the proposal) and be computed based on:

  • the estimated revenue generated by the protocol across all chains
  • the sum of agEUR staked in all stEUR contracts across all chains where stEUR is activated

Intent is NOT to change the rate formula which should remain:

Capture d’écran 2023-10-09 à 09.02.54
Capture d’écran 2023-10-09 à 09.02.54938×150 6.92 KB

$$rate = \min(0.9\frac{\texttt{est. yearly interest revenue}}{\sum\texttt{agEUR staked}},10%)$$

Implementation

Launching the stEUR contract on a chain only implies:

  • granting this contract the minter role on the agEUR contract
  • setting the maximum settable rate to 10% so the guardian multisig can update the rates proposed

In this implementation for stEUR cross-chain, this means that to get stEUR on a chain people would need to get agEUR on this chain and then stake it.
In particular, stEUR would never be the token that’s bridged but rather a token that can be obtained upon staking minted agEUR.
Rationale for this is that:

  • the protocol already has a functional bridge infrastructure built around agEUR and it’d require significant engineering efforts to make it available to stEUR
  • this is purely equivalent to the protocol on a balance sheet level: one agEUR remains a liability to the protocol wherever it is. And an agEUR staked on Ethereum is the same from a protocol perspective as an agEUR staked on Gnosis Chain for instance

Note that the consequence of this is that the value of stEUR is going to value between different chains. 1 stEUR on Gnosis Chain is not the same as 1 stEUR on Ethereum, as the exchange rate between stEUR<->agEUR encoded in each contract implementation is going to vary on each chain.

Value to the protocol

This aims at making stEUR more accessible to smaller DeFi users.

Gnosis Chain is the place where Euro DeFi is growing, and having stEUR there can allow for interesting integrations: like using stEUR as a collateral to borrow EURe and offramp to pay with Gnosis Pay.

Risks

This increases the risk of creating huge bridge imbalance between chains, like having negative flows from a chain like Optimism to Gnosis Chain, thus meaning that it’d be impossible for other “organic” users to bridge from Optimism.

It also increases the operational overhead with maintaining and adjusting the rates of the stEUR contract but it’s something which can be automated quite easily.

This is why we’re proposing here to start with just a single sidechain, to potentially later generalize to other chains.

4 Likes
2

Hello,

Good idea,

Why Gnosis and not also Polygon (for e.g. competitor EUR stable coins allowing on/off ramp like EURe and EURS are also on polygon where many users are. And also I think EURe liquidity is better in Polygon compared to Gnosis, no?)

Regards,

1 Like
3

I completely agree with this proposal, particularly due to the synergies that may exist with EURe stablecoin. In addition to this relationship allowing the conversion of stEUR into EURe and carrying out the capital offramp, it will also be possible, in the opposite direction, to create a EUR onramp through EURe, whose resulting capital will be able to access a EUR yield product such as stEUR .

5 Likes
4

Good point, here I’m just suggesting Gnosis as a start because there is a clear path for integrating stEUR when it’s live, but eventually we should aim for stEUR to be live in as many chains as possible!

2 Likes
5

In the wake of the Arbitrum proposal that will most likely pass for Angle, I’m updating this proposal to deploy stEUR on both Gnosis Chain and Arbitrum!

Here is the updated proposal:

Hello,

This is a proposal to activate the stEUR contracts on Gnosis Chain and Arbitrum.

Context

The stEUR contract has already been deployed at the same address across different chains.
Yet so far, it is only activated on Ethereum mainnet, meaning only stakers of agEUR on Ethereum mainnet can take advantage of the yield that’s proposed here.

Having stEUR live on Gnosis Chain and Arbitrum (just like any other L2 or sidechain) means that it’d be possible for agEUR holders there to stake their agEUR and start receiving the savings yield provided by the protocol with limited gas fees.

Proposal

This is a proposal to activate the stEUR contract on Gnosis Chain and Arbitrum, follow the same rate policy as what is currently supported on Ethereum, and generalize this cross chain rate policy and methodology for stEUR for every subsequent deployment of the stEUR contract on another chain.

This means that the stEUR rate should be the same across all chains where it is deployed (starting with Ethereum, Gnosis Chain and Arbitrum here with the proposal) and be computed based on:

  • the estimated revenue generated by the protocol across all chains
  • the sum of agEUR staked in all stEUR contracts across all chains where stEUR is activated

Intent is NOT to change the rate formula which should remain:
$$rate = \min(0.9\frac{\texttt{est. yearly interest revenue}}{\sum\texttt{agEUR staked}},10%)$$

Implementation

Launching the stEUR contract on a chain only implies:

  • granting this contract the minter role on the agEUR contract
  • setting the maximum settable rate to 10% so the guardian multisig can update the rates proposed

In this implementation for stEUR cross-chain, this means that to get stEUR on a chain people would need to get agEUR on this chain and then stake it.
In particular, stEUR would never be the token that’s bridged but rather a token that can be obtained upon staking minted agEUR.
Rationale for this is that:

  • the protocol already has a functional bridge infrastructure built around agEUR and it’d require significant engineering efforts to make it available to stEUR
  • this is purely equivalent to the protocol on a balance sheet level: one agEUR remains a liability to the protocol wherever it is. And an agEUR staked on Ethereum is the same from a protocol perspective as an agEUR staked on Gnosis Chain for instance

Note that the consequence of this is that the value of stEUR is going to value between different chains. 1 stEUR on Gnosis Chain is for instance not the same as 1 stEUR on Ethereum, as the exchange rate between stEUR<->agEUR encoded in each contract implementation is going to vary on each chain.

Value to the protocol

This aims at making stEUR more accessible to smaller DeFi users.

Gnosis Chain is the place where Euro DeFi is growing, and having stEUR there can allow for interesting integrations: like using stEUR as a collateral to borrow EURe and offramp to pay with Gnosis Pay.

When it comes to Arbitrum, the protocol should very soon receive an ARB grant to incentivize stEUR liquidity on the chain. Not only will it make stEUR more accessible, the fact that we can use the grant to incentivize stEUR liquidity means that there is a potential for making Arbitrum the chain with the biggest stEUR adoption

Risks

This increases the risk of creating a huge bridge imbalance between chains, like having negative flows from a chain like Optimism to Gnosis Chain, thus meaning that it’d be impossible for other “organic” users to bridge from Optimism.

It also increases the operational overhead with maintaining and adjusting the rates of the stEUR contract but it’s something which can be automated quite easily.

This is why we’re proposing here to start with just two sidechains, to potentially later generalize to other chains.

3 Likes
6

Do the tokenized RWAs that are the basis of stEUR yield live only on the Ethereum Mainnet or do they also live in Arbitrum and Gnosis?

1 Like
7

They’re only on EThereum, but this needs to be seen at the balance sheet level, like an agEUR is a liability to the protocol wherever it is, and you don’t need assets and liabilities to be present on every chain for the system to be stable

1 Like
8

Thanks for your quick reply.

1 Like
9

Given the integration of stEUR into Gnosis Chain and, given the close collaboration between Gnosis Chain and Monerium EURe within the scope of their Gnosis Pay product, would it be appropriate or not to consider the creation of an agEUE-EURe Pool, as well as a stEUR-EURe Pool ? Perhaps it will be possible to obtain the support of Gnosis DAO.
This would create the foundations for the introduction of a EUR yield product in parallel with the Gnosis Pay payment system.

1 Like
10

Hey Pedro!

Thanks for the great point! This is in the works!

Karpatkey is working on setting up a stEUR-EURe pool and we’re working to list stEUR as a collateral on a lending protocol on Gnosis Chain so people will be able to: lend stEUR, borrow EURe to pay having the best of both worlds at the same time

3 Likes
11

Given the expansion of stEUR to new chains such as Gnosis and Arbitrum and, since the entire volume of stEUR is not applied to the acquisition of yield assets (namely bC3M), there are future plans to create a pool of locked stEUR, through which all resulting liquidity can be invested in yield assets?
The objective would be to increase TVL and the protocol’s yield funds.

1 Like
12

Sorry seeing this message just now! Not sure to understand your thoughts here, do you mean launching a locked version of stEUR where we’ll take advantage of the fact that there are locked agEUR to invest in potentially less liquid products with the protocol?

1 Like
13

Well, what I intended to suggest was to create a pool of locked funds that would allow the protocol to acquire new assets or trigger investment strategies that increase the equity and yield of the protocol in order to sustain the stEUR yield during the progression of the issuance of stEUR. Am I making sense?

14

Ok interesting, do you have any of such strategies in mind?

Because it could come with a risk of funds

15

Ok, let me think about this.