Here’s an idea that could scale across n protocols like Babylon as they pop up in order to onboard small to medium sized less sophisticated or passive investors into the Euro stablecoin concept.
I’m looking for feedback on the idea and then for someone to own it with me. This is the first time I’ve mentioned it anywhere. Timestamp!
Babylon is a protocol in beta which offers a venue to run an investment club. They’re going live next month I think and their $BABL token is already up.
I was thinking about applying to create a Garden that I’d call Erasmus in order to support the development of the Euro stablecoin market.
The Garden would hold stablecoins pegged to the Euro and run associated yield strategies. It would use Dai as reserve asset (Dai and WETH can be reserve assets right now).
So basically the Erasmus garden would pool funds from n investors and then deploy strategies at a single gas cost. These strategies could include hedging or speculating on EUR.USD. Anyone can propose strategies. Babylon doc is here: Introduction - Babylon.finance
Babylon will soon vote on BIP-5 Garden Seed through which the protocol may help seed new Gardens from its treasury account up to $200k in order to drive user growth, TVL, and community engagement [blah blah].
I would put in seed money of maybe $20k and I can probably get another 20k from friends and family and then Babylon would match $20k maybe if they chose Erasmus as part of BIP-5. Even if they don’t then Erasmus could launch but by being part of BIP-5 it would get exposure and so would Angle.
Obviously the idea would be to grow the Garden to multiples of those initial sums but it probably would never be gigantic unless zillions of retail/small players shared the vision/objective and wanted to pool gas costs. The concept however could scale across competing investment club protocols.
Feedback and discussion appreciated. I’m here to learn too. Decision needed on whether to apply probably under BIP-5 with 10 days. BIP-5 may go for vote next week but irrespective of that a Garden can be launched any time.
Cheers
BobZF
Full Disclosure
I’m an agEUR holder, staked
I don’t have anything in Babylon or $BABL or any relationship with anyone who does
I benefited from Erasmus funds to complete 2 years at a French biz school and i think this name/branding resonates a lot for Europeans who’ve gone through higher education.
Didn’t know about Babylon until now, thanks for sharing! Still looking at their docs, not sure I got all of it already but it looks like a more modular version of Yearn.
About your specific proposal of creating a EUR stablecoin garden with different yield strategies, I think it’s a very good idea in theory, but I’m afraid the fact of having DAI or ETH as reserve assets would make it complicated in practice, as the Garden creator and strategists would have to take into account the EURUSD price change.
I’m sure there are some integrations that can happen though, will be nice to see what people think about this!
I don’t know if Yearn enables pooling of funds but in Babylon a group of n individuals can invest in the Garden and act as one investor/trader and hence saves on gas costs and they get the other benefits from acting as a group
For EURUSD, I thought that if the Garden entered into a leverage HA position with Angle then they could get exposure to USD vs the EUR on the other side. If USD falls, they gain on the agEUR appreciation and vice/versa so it’s net neutral minus fees/spread (have I understood that correctly?).
If some of investors were funding in EUR in the first place then they wouldn’t need this hedge but they’d still have to sell EUR to buy Dai in order to enter the Garden.
2 suggestions that Babylon might take on board could be
to have agEUR as a reserve asset (this would probably be a mid/long term story as/when AgEUR proves itself
Another thing to bear in mind in that Babylon say they have around 30 gardens so far, many if which are private so don’t appear on their app. I can’t see their TVL anywhere. The Erasmus Garden could be public or private and either way smaller ticket guys could be steered there from the Angle discord/website and maybe get a fee sharing/referral fee from Babylon.
I’m sure there would be other “B2B” possibilities to brainstorm/triage (I was a TradFi B2B Fintech Biz/Non tech guy for a long time and worked with a lot of Frenchies btw - now on a pause but my radar are alway up).
You’re right, you can be neutral minus fees / spread by getting EUR stablecoins and opening perp!
Otherwise, really appreciate the idea of it! Would be interesting to have an idea of the Babylon TVL.
I think the idea and erasmus branding are great ! I would have to dig into Babylon Finance but it looks like a great way to bundle retails investment to avoid the huge gas cost of L1
I haven’t decided yet btw to follow through with this. I’ll be back at ‘work’ on such things on Thursday and will decide soon after.
The BIP has been issued (see link below). It’s open for voting already I think and there’s some mention of it being presented during a community call on the 16th.