AIP - 86: Swap EUROC to bERNX and bC3M

Angle Improvement Proposals
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2

Thanks for the proposal!
Especially love the analysis on agEUR liquidity profile and the need to keep a liquidity ratio of at least 21%.

With this proposal and given the analysis, for the actual implementation, below is what I would propose.

In terms of exposures, from your analysis, we want ~30% in liquid assets
With this we can get the following fees: Transmuter EURA Updated Fees - 02/24 - Google Sheets

TL;DR:

  • for EURC: max exposure at 70% (so we don’t block someone who would do a large mint to much), min exposure at 10%
  • for bC3M: max exposure 50%, min exposure at 25%, no mint fees, burn fees at 50 bps to compensate for acquisition costs
  • for bERNX: max exposure 50%, min exposure at 25%, no mint fees, burn fees at 50 bps to compensate for acquisition costs

This is what would be enforced onchain and more the security measures in terms of the max that we want to have on the protocol.
The rebalancing rules would have to be set through offchain coordination, and rely on the setup we voted in the past with the guardian to subsidize the acquisitions of tokenized securities when exposures go beyond certain thresholds.

Ideally we want 35% in IB01, 35% in ERNA, the 30% remaining in EURC
With this:

  • if EURC exposure is above 40%, we rebalance till 30% exposure to EURC
  • if EURC exposure is below 15%, we rebalance till 30% exposure to EURC

When it comes to the oracles, there is currently an issue where when oracles deviate from their target prices it affects the burn price for all other collateral assets. We can apply for each collateral a deviation threshold below which small deviations are not considered:

  • for EURC: we take a base rate of 1 and apply no deviation when EURC trades plus or minus 5bp with its current price
  • for bC3M: we use Redstone oracle and then compare this rate with the ATH observed for this token as the target price, with no deviation reported when current price is within 50bp of the max price
  • for bERNX: we use Backed oracle and then compare this rate with the ATH observed for this token at the target price, with no deviation reported when current price is within 100bp of the max price ever observed

Overall implementation of this proposal implies swapping 7m EURC into ERNX

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