This is a proposal to use 70k USDC of the treasury to fund a Chainlink oracle for agEUR on Ethereum for the coming year.
Context
Chainlink is an essential oracle provider used by many DeFi protocols to get the prices of the tokens they’re dealing with. It is one of the most secure price feed solution and has a long track record of being robust.
For many protocols, including lending protocols like Aave, it’s impossible to integrate an asset without having an oracle for this asset. To this extent, in many cases, it’s going to be impossible to integrate agEUR and by extension stEUR in a protocol without having a Chainlink feed for it.
The thing is that Chainlink oracles do not come for free. There is a cost to set a feed up and a cost to maintain it (to cover notably the gas costs to regularly update the feeds).
Here, for an agEUR/EUR feed on Ethereum, Chainlink Labs requires a $5k setup cost and a monthly cost equal to the maximum between $5k and 1.2 times the monthly operational costs for the oracle.
Given the low volatility of the agEUR/EUR pair, we don’t expect a ton of updates on the feed (at least 30 a month) and so most likely the realistic but minimum price to expect for the oracle is $65K during the first year for the oracle.
Angle DAO has accumulated an equity for agEUR equal to €6.8m. Exact figures can be found here. And so a $70k expense for the DAO represents less than 1% of the protocol’s equity.
Proposal
Proposal is to transfer 70k USDC from the governor to the guardian multisig on Ethereum so the guardian multisig can then proceed to the monthly payments of LINK tokens to cover the contract with Chainlink Labs.
Chainlink Labs expects payments in LINK tokens, and the guardian multisig will take care of swapping the USDC into LINK regularly.
Value to the protocol
This feed is key in achieving a next phase of growth for Angle, agEUR and stEUR.
Without it, it’s going to be extremely hard to integrate Angle assets into major DeFi protocols on Ethereum.
For instance on Aave, a Snapshot vote to add stEUR as a collateral has passed, but the onchain implementation hasn’t been done so far because of the lack of proper oracle for agEUR.
Note here that only an oracle for agEUR is needed because the stEUR-agEUR can be derived directly from the smart contract.
This Chainlink integration can unleash a wave of integrations for stEUR, thereby helping the protocol grow and later down the line increase its revenue.
Implementation
If the terms for this contract were to change, the guardian multisig would send the funds that would remain unused for the year back to the governance multisig.