Curtis & Alan here (again) from the Balancer Partnerships Team. We’ve been in touch with Pablo for a long time and we would love to share some additional ideas with the community that would strengthen the relationship between Angle & Balancer.
Background on Balancer & veBAL:
Balancer is a community-driven protocol, automated portfolio manager, liquidity provider, and price sensor that empowers decentralized exchange and the automated portfolio management of tokens on the Ethereum blockchain and other EVM compatible systems.
Balancer Pools contain two or more tokens that traders can swap between. Liquidity Providers put their tokens in the pools in order to collect swap fees. Balancer’s fully flexible design space opens the aperture of possibilities for all types of liquidity providers and their respective considerations.
veBAL (vote-escrowed BAL) is a locked 80/20 BPT (Balancer Pool Token) composed of 80% BAL / 20% WETH. veBAL has a max. lock time of 1 year and can be used to direct BAL Liquidity Mining incentives on the Balancer Platform, vote on governance, and receive a portion of all protocol fees that Balancer produces.
With the release of Circle’s EUROC it looks like the Euro Stable market on Mainnet is poised for a huge boom (on that note I did some personal research, USD stables grew in market cap at a rate 18x higher than Crypto during the bull run, and Euro Stables grew 4x higher than USD stables - insane!).
In DeFi, the 3pool (USDC/USDT/DAI) dominates most DEX’s stable liquidity pools. While both Tether and Circle have their own EURO stable models, there currently is not a go to third option for EURO stables. We believe that agEUR is uniquely positioned to become the go to third option in DeFi. Balancer, its Stable/Linear Pool Design and burgeoning veBAL wars can help play a pivotal role in that idea.
Current State of agEUR Liquidity:
Currently a large portion of agEUR liquidity on Mainnet is tied up in a Curve 3EUR vault, paired against USD stables on Uniswap or within a USD perpetual contract (source). While this is OK for where the current overall EURO stable market is, we believe that in order for agEUR to scale with the new players that have entered, an additional single point of liquidity will have to be created to allow for the deep trades that will happen .
Shift ANGLE incentives towards bribing a stable pool on Balancer featuring either agEUR/EUROC/EURT or agEUR/EUROC/EURS (Or some other composition of Euro Stables to drive maximal adoption). Stable Pools feature similar math to Curve’s Pool Design and allow for very low slippage swaps between like-kind assets. The current ROI for bribe voting is returning 2.80x-5.80x (source), meaning just $10k in bribes returns $30-60k in liquidity mining rewards per week. Posting such high APR on stable pools has shown a positive correlation with growing TVL in the pool, which would subsequently draw additional eyes and users to the Angle platform.
Completing this and focusing on liquidity concentration + attraction of pool users could be a very effective way for Angle to seize the narrative and position itself as the “DAI” of the EURO 3pool of tomorrow.
I look forward to hearing your feedback/comments and chatting more about this proposal!