This is a proposal to shift agEUR UniV3 liquidity to lower fees pools on Ethereum mainnet.
So far the protocol has two deep Uniswap V3 pools: agEUR-USDC with 0.05% fees and agEUR-ETH at 0.3% fees.
While these fees are generating some fees, they are not getting the volume they could have get if they had far smaller fees. Sebastien’s experiment on Polygon showed that with smaller fees pools you can make for more volume than
agEUR is an asset built to be a base DeFi object. As such it should be part of routes used to switch from one asset to another. In particular, agEUR should be THE asset used to get access to other Euro stablecoins: like if you want EURs or EURt: you should be able to get it from agEUR.
One way to have agEUR as a Core asset used for trades is for it to be on lower fees pools.
We are therefore proposing to switch the agEUR liquidity to lower fees tiers. As such:
- agEUR-USDC could be switched from a 0.05% tier to a 0.01% tier
- agEUR/wETH from a 0.5% tier to a 0.05% tier
This would help increase usage of agEUR, and hence potentially fee revenues from agEUR LPs (if volume increases more than the decrease in fees).
Most of the liquidity is so far stored in Angle liquidity gauges under the form of G-UNI tokens. These tokens are ERC-20 tokenized LP positions on Uniswap pools.
What we could do as part of the switching could be to upgrade each liquidity gauge contract so that these contracts consider that G-UNI tokens corresponding to the new pools have been staked, and in the meantime a governance manipulation could be done to atomically move the liquidity from one pool to another.
We will have to be careful for when it comes to switching agEUR-wETH liquidity as an oracle used by Euler is built on top of this. Switching should be done in two steps:
- Switching half of the liquidity to the new pool
- Waiting for Euler to upgrade its reference to the oracle for agEUR and switching the rest to the new pool
This implementation detail has the advantage that no user action will be required to switch liquidity (for those who staked their G-UNI tokens in the gauge), and that the address of the gauge contracts will remain the same: meaning that no votes will have to be shifted
Problem on the other hand is that some people may have put their liquidity because they were confident in a 0.05% pool, but not a 0.01% pool and as such they may not want their liquidity to be moved without their consent.
To do this, we propose a 1 week time window before the implementation of the change to let people who do no longer want to be part of it to move their liquidity
This is an important proposal for the protocol which should obviously be voted by veANGLE holders. Leaving this to discussion at this point, there is going some implementation by the Core Team to make sure liquidity migration and contract upgrades could be made in a single transaction to remove space for attacks.