Introducing agEUR-as-a-Service with Angle & Paladin
On April 30, the Angle community approved a partnership with Paladin to utilize Ondo’s Liquidity-as-a-Service offering. This partnership will enable the use of $agEUR as liquidity for $PAL.
Angle will become the first project to utilize Liquidity-as-a-Service with a euro-pegged stablecoin. Angle’s approval follows an initial proposal by the Paladin community, who overwhelmingly voted to approve PGP-10 on April 30, with 14.6M (95.6%) positive votes.
What is agEUR-as-a-Service?
agEUR-as-a-Service (agEUR-aaS) is a new offering from Angle and Ondo to make it possible for projects issuing tokens to increase liquidity on decentralized exchanges.
This offering complements the already existing Liquidity-as-a-Service program from Ondo as it introduces the ability to build liquidity in a Euro-denominated stablecoin. This will better meet the needs of European protocols who now have the choice between USD or EUR stablecoins.
With agEUR-aaS, a project can deposit its token into an Ondo liquidity vault with a fixed duration. Angle will match those deposits with an equivalent amount of agEUR to form a liquidity pair. In exchange for providing agEUR, the Angle DAO will receive a fixed APR return on its provided liquidity.
How will it work?
Angle will supply 500,000 agEUR to the fixed tranche of Ondo’s liquidity vault. Paladin will match the tokens in equal value to supply €500,000 in PAL to the variable tranche. The result will be a €1M liquidity pair which will be available to trade on Uniswap v2.
In exchange for providing agEUR, the Angle DAO will receive a fixed 4% APR return on its provided liquidity, with an initial vault duration of 3 months.
How will agEUR-aaS benefit Angle & Paladin?
With agEUR-aaS, Paladin will achieve twice as much liquidity from the same amount of capital. As noted in PGP-10, agEUR-aaS is an incredibly cost-effective form of liquidity:
Currently there is 5.26% slippage for a 25,000 USDC buy, 7.93% for a 50,000 USDC buy and 12.56% for a 100,000 USDC buy…[this partnership] will add $1.1M of depth, enabling $50k trades under 4% slippage and raising trade volume by creating a third pool to arbitrage…[this program will] quell a temporary delay in liquidity depth with a significantly cheaper budget than liquidity mining.
Paladin will benefit from PAL exposure to another DEX, in this case Uniswap v2, without the need for costly liquidity mining (LM) incentives in the form of mercenary liquidity in order to grow liquidity. Despite being costly, traditional LM dilutes token holders and increases sell pressure on the token.
With agEUR-aaS, Paladin can also retain all trading fees and capture the potential upside value of the trading pair. This reduces the risk of impermanent loss (IL) and often outstrips the cost of capital.
For Angle, the vault will provide a stable APR while removing the risk of IL. Their agEUR stablecoin will gain further liquidity via another token pair, and will form part of only three pools that PAL is traded in. This partnership allows Angle to increase the utility of agEUR while earning revenue for the protocol.
Angle now sets the stage for further partnerships with other token issuers who wish to utilize agEUR-aaS to gain cost-effective liquidity in the form of agEUR. If you know of or represent a DAO that might be a good fit for agEUR-aaS, please reach out to our team.
What is Angle?
Angle is a decentralized stablecoin protocol predominately deployed on the Ethereum blockchain. It is used to issue stablecoins, called agTokens, and claims to be starting with “the first liquid Euro stablecoin on-chain”.
What is Paladin?
Paladin is a decentralized governance lending protocol deployed on the Ethereum blockchain which enables users to loan voting power in their governance token, or borrow voting power.
Ondo Finance is building a decentralized investment bank. We are building software that finds attractive investments across the traditional and DeFi landscape, repackages these assets into easily understood risk/reward offerings, and then matches and offers these assets to both institutional and retail investors. Join our community to stay up-to-date with our latest developments and product launches!
Vaults | Twitter | Telegram | Docs | Github
Legal Disclaimers
This announcement has been written and published by Ondo Finance Inc. and provides no guarantee, commitment, or undertaking to utilize any of its assets, funds, properties or personnel, Ondo Protocol users or other protocol participants. Ondo Finance does not owe, and does not intend to assume, any duties or obligations to Ondo Protocol users or participants, other than duties or obligations arising under laws of general application, such as non-waivable torts.
To the maximum extent permitted by applicable law, all software relating to Ondo Protocol is being provided on an as-is, where-is basis, with no representations or warranties being made to Ondo Protocol participants and with no liability to Ondo Finance or any other person involved in the development of Ondo Protocol. The statements set forth in this announcement also are not intended to be representations, warranties, guarantees or assumptions of duty or liability of any kind, and Ondo Finance hereby disclaims the foregoing and will not be liable for any damages arising from use of Ondo Protocol. In the event of any conflict or inconsistency between this announcement or any other communication and the terms of any software license involved in Ondo Protocol, the terms of the software license shall govern to the exclusion of this announcement and such other communications.
The forward-looking statements in this announcement are subject to numerous assumptions, risks and uncertainties which are subject to change over time. Such assumptions, risks and uncertainties could cause actual results or developments to differ materially from the results and developments anticipated by us. Even if our anticipated results and developments are realized, such results and developments may nevertheless fail to achieve any or all of the expected benefits anticipated by this announcement. We reserve the right to change the plans, expectations and intentions stated and implied herein at any time and for any reason or no reason, in our sole and absolute discretion, and we undertake no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.
This announcement is not intended to provide legal, financial or investment or other advice and we recommend that you do not rely on, and do not make any financial or other decision based on this announcement.