Hello,
This is a proposal to activate the stEUR contract on Celo.
Context
The stEUR contract has already been deployed at the same address across different chains.
So far, it has been activated on Ethereum mainnet, Arbitrum and Gnosis Chain, meaning only stakers of agEUR on these chains can take advantage of the yield that’s proposed here.
Having stEUR live on Celo (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 proposal is to activate the stEUR contract on Celo.
Like what was voted here for the deployment of stEUR on Gnosis Chain and Arbitrum the rate policy for Celo must remain the same as what it is on other chains.
In particular, the stEUR rate must be the same across all chains where it is deployed 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 for this particular deployment which must remain:
$$rate = \min(0.9\frac{\texttt{est. yearly yield earnings}}{\sum\texttt{agEUR staked}},10%)$$
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
To get stEUR on a chain people would need to get agEUR on this chain and then stake it.
In particular here, stEUR is not a token that’s bridged but rather a token that can be obtained upon staking minted/bridged agEUR.
Rationale for this implementation was 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 Celo.
Note that the consequence of this is that the value of stEUR on Celo is going to be different from what it’s worth on Arbitrum, Gnosis chain or Ethereum (which also all differ from one another).
Value to the protocol
This aims at making stEUR more accessible to smaller DeFi users who are using the Celo blockchain, and to protocols on the chain. In particular, goal of this proposal is to facilitate the onboarding of the Mento protocol which put a proposal to acquire around €3m of stEUR in the backing of their cEUR product.
Risks
This proposal increases the exposure of Angle to Celo, as it will lead in some way to a native issuance on the chain. It also increases the risk of creating a bridge imbalance between chains, like having negative flows from a chain like Optimism to Celo, 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.