[ARFC] AgEUR risk parameters Aave Polygon V3 update

Governance
1

title: [ARFC] AgEUR risk parameters Aave Polygon V3 update

Author: @marczeller - Aave Chan Initiative

Dated: 2023-03-01

Summary

AgEUR is a decentralized, overcollateralized stablecoin minted by the Angle protocol. Users of the Angle Protocol can mint AgEUR by locking collateral in vaults.

For more information about AgEUR, please refer to AgEUR Polygon V3 ARC.

This ARFC presents the Aave governance with an opportunity to change the risk parameters for AgEUR, making it a collateral asset on the Aave V3 Polygon market.

Abstract

This ARFC presents the Aave governance with an opportunity to change the risk parameters for AgEUR, making it a collateral asset on the Aave V3 Polygon market.

Motivation

AgEUR is the primary EUR-pegged decentralized stablecoin available on the Aave V3 Polygon market.

One of the key strategic features of Aave V3 is eMode, and Polygon has enabled a stablecoin eMode. By allowing an LTV for agEUR, Aave users can take directional and hedging positions on EUR/USD, which offers more granularity to their Aave experience.

eMode and “FX-trading” enabled by Aave V3 could also be an interesting area of development for the protocol’s usage. Third-party apps could build on top of Aave for new use cases.

AgEUR is designed to be efficient and can be minted at fair value using another stablecoin, which helps ensure the peg remains resilient over time.

The newly proposed risk parameters replicating the MAI parameters are merely suggestions to start the conversation,. The ACI is inviting Risk Service Providers to provide feedback on them.

Specification

Ticker: AgEUR (AGEUR)

Contract Address: 0xE0B52e49357Fd4DAf2c15e02058DCE6BC0057db4

Risk Parameter Value
Isolation Mode YES
Enable Borrow YES
Enable Collateral YES
Loan To Value 75%
Liquidation Threshold 80%
Liquidation Bonus 5%
Reserve Factor 10%
Liquidation Protocol Fee 10%
Borrow Cap 1.5M
Supply Cap 3M
Debt Ceiling 1.5M
Base 0%
Slope1 4%
Uoptimal 90%
Slope2 64%

Disclaimer

The Aave-Chan Initiative (ACI) is not associated with or compensated by Angle to publish this AFRC.

As part of its delegate platform, the ACI promotes stablecoin diversity.

At the time of writing, Marc Zeller, the founder of ACI, does not possess any ANGLE, the native asset of the Angle protocol, and holds only a small amount of agEUR.

However, Marc Zeller has a compensated role as a DeFi strategy advisor with the Polygon Foundation. This third party made no request or compensation for this AFRC.

Copyright

Copyright and related rights waived via CC0,

1 Like
2

Would be a great add-on for the European ecosystem. Currently yield opportunities around agEUR and € stablecoins are pretty limited in general, enabling agEUR as a collateral in isolation mode would make possible the strategy where people lend €, borrow USDC, farm in USDC (or something else), and swap the difference between the yield and borrowing cost in agEUR.

1 Like
3

100% in Favor (as well for Optimisn) . Let’s do it. It is good for Angle, good for AAVE, good for non USD stable coins users!

4

Due to agEUR depeg following their D3M module into Euler that has been exploited, the ACI won’t escalate this proposal to snapshot stage.

It should be noted that if this proposal had passed before the exploit, the collateral nature of this onboarding and relatively low Liquidation bonus would have surely led to Aave excess debt.

It is a good indication that the policy of ACI of waiting for risk dao service provider before escalating a proposal that has a collateral factor is a good practice, the ACI provides risk parameters to start a conversation but the community should always consider feedback and proposition from specialized service providers, their feedback is always a net value add for the DAO.

2 Likes