AIP - 93: Adjust ANGLE Protocol Owned Liquidity


This is a proposal to adjust the liquidity positions held by the protocol as part of its Arrakis PALM market making program.


In August last year, it was voted to start a program to bootstrap ANGLE liquidity on the ANGLE-ETH pool on UniswapV3 on Ethereum.
This significantly increased the ANGLE liquidity onchain, but after 9 months, it may be time to reevaluate the position.

To track the evolutions of the position, and how it performed, you may check this dashboard.

While the vault started with a 80% position in ANGLE and 20% in ETH, its composition is now 20% ANGLE and 80% in ETH.
At one point it even went down to 97% in ETH - 3% ANGLE.

In effect, as it stands when the ANGLE price is decreasing, the vault is effectively buying back some ANGLE tokens it had sold at a potentially higher price than the selling price, and when the ANGLE price is increasing, the vault is getting dry in terms of ANGLE liquidity.

While the ANGLE token is live on many sidechains and L2s, including Polygon, most of the liquidity remains on Ethereum. This means that it’s getting hard for small buyers to access and buy the token. The token is listed on but liquidity remains limited. is however connected to the ANGLE Polygon deployment, this means that any movement of ANGLE on Gate or on Polygon, is arb-ed on the other platform.

For instance, someone buying ANGLE on Polygon should lead someone to buy ANGLE on Gate. Going further the liquidity on Polygon can be easily replicated on Gate. Technically if I post a market order on Gate, it’ll be filled as soon as the price of ANGLE on Polygon hits the threshold. In a way, having the ANGLE token liquid on Polygon is a way to improve ANGLE liquidity on the Gate CEX.


The proposal is to adjust the position of the PALM vault on Ethereum by pulling ETH so that the composition of the ANGLE-ETH vault on Ethereum becomes 50% ANGLE - 50% ETH, bridge the recovered ETH on Polygon and start a new PALM vault on a Polygon Uniswap V3 ANGLE-wETH (1%) pool with 50% ETH and 50% ANGLE.


ANGLE to add to the position would be taken from the ANGLE tokens held on the DAO treasury on Ethereum, and the protocol PALM position on Polygon would be managed by the protocol emergency multisig on Polygon.

Value to the protocol

This proposal brings several advantages:

  • it makes the ANGLE token liquid on a sidechain and thereby available to more small players
  • doing so, it facilitates arbitrages with the largest CEX on which ANGLE is available: Gate
  • it does not require bringing more capital in for the protocol as it just leverages the ETH that got accumulated from the PALM position on Ethereum which in a way sold ANGLE tokens against ETH

Also, since on Ethereum it just pulls ETH, it doesn’t deteriorate the liquidity for people looking to buy the ANGLE token on Ethereum and spreads the ETH liquidity for people that are selling between Ethereum and Polygon.

Next steps

While Polygon is not the most active chain currently, there is some value in going there due to the connexion with We could envision in the short term extending this on other chains like Base.

In any case, this proposal would be of course a first step in improving the liquidity of the ANGLE token and at Angle Labs we’ve been actively working on listing the ANGLE token on more centralized exchanges recently.

1 Like

Arrakis supports this proposal as it is aligned with our liquidity bootstrapping strategy offered to clients like ANGLE and tested multiple times. Since the start of the Angle Market Making program via Arrakis PALM the program has successfully bootstrapped ca. 140 wETH growing the vault TVL size by about ~100%. We support the proposal of @sogipec to continue this bootstrapping of liquidity on L2s - starting with Polygon.

I’m not sure 100% I understand the proposal :slight_smile: .

  1. Can you state what is now the liquidity provided on the UNIV3 ANGLE/ETH (eg. how much money for each asset).

  2. So You will remove some ETH from the UNIV3 ANGLE/ETH ? How much ?

Thank you in advance,

Sorry should have made this clearer. I had the dashboard under the eyes so made more sense to me.

Currently in the PALM program, there are currently 1.2m ANGLE and 177 wETH in the position on Ethereum. At current prices, we’d pull 130 wETH to leave 1.2m ANGLE and 40 ETH on the position, and we’d pair on Polygon 130 wETH with 130 wETH worth of ANGLE tokens.

OK great ! Arrakis is somehow able to arbitrage between the two UNIV3 ethereum and polygon ?

No arbitrageurs would need to do it, but Arrakis would deposit liquidity on the 2 UniV3 pools on Ethereum and Polygon

Thank you for sharing your proposal. Although Polygon is one of most robust blockchains, there is a growing demand for buying tokens with more affordable fees on Layer 2 solutions such as Arbitrum, Optimism (OP), and Base. I believe that the most urgent need for ANGLE liquidity is on Arbitrum. I have observed that there is a significant slippage that results in losses for users who attempt to accumulate ANGLE tokens.
Could you please provide more details on your plan to increase ANGLE liquidity on these chains?