ANGLE tokenomics upgrade is on its way 🚀
Angle moved quickly in its first month, it’s going to go at lightspeed in the coming weeks!
Wrapping up the first month of Angle
Angle protocol has been live for a little over a month now, and agEUR has been the biggest EUR stablecoin for more than three weeks already! On top of that, the different parts of the protocol are functioning as expected: SLPs earn an increased yield on their capital while over-collateralizing the protocol, and HAs can open leverage long positions on the available tokens (USD-stablecoins for now). Both agents earn ANGLE tokens as rewards for securing the protocol.
Since launch, the team never stopped buidling and the protocol reached a few important milestones:
- The deployment of new tokens accepted as collateral in the protocol: FEI & FRAX can now be used to mint agEUR.
- A Curve 3EUR pool was created. CVX holders are currently being incentivized by the protocol to distribute more CVX & CRV rewards to LPs of this pool.
- Both agEUR & ANGLE were natively bridged to Polygon. This allows to open new use cases and see more clearly how to manage the cross-chain ecosystem.
- agEUR constantly kept its peg to the EUR, and remained fully redeemable in the protocol at all times.
- In one month, the protocol has redistributed more than $700k of transaction fees and interests to SLPs and generated more than $1.5M in surplus.
Discussions about ANGLE
During this first month of being live, discussions about various topics started within the community. They have helped shed some light over specific aspects of the protocol, and has started very useful conversations about the future of Angle.
One discussion that has been coming back a lot is about the protocol governance token (ANGLE) and its tokenomics. Despite the success of the protocol, its token has seen some sell pressure, likely due to high emissions for the first few months and the fact of having no direct financial utility for ANGLE. This is a very important topic, and you can follow some of the discussions that took place here: https://gov.angle.money/t/improving-angle-token-utility/168/7.
While we knew some kind of revenue sharing mechanism would have to be put in place at some point, these discussions with the community brought the subject forward much faster, and two principal options stood out: the xSUSHI / sSPELL model with a simple profit redistribution, and the veCRV / veFXS model, with a locking mechanism, profit redistribution, and a boost on rewards for locked token holders.
After a few back and forth, the community and the team both started leaning more towards a locking mechanism a la Curve/Frax. The main reason is the presence of this locking mechanism, which adds a time commitment necessary for ANGLE holders to be able to get all the benefits they are entitled to. This aligns the time horizon of ANGLE holders and the protocol, allowing for better decision-making. On the other hand, just staking the tokens don’t bring nearly as much commitment from users. Once the direction was clear, we drew from both code bases and started building our tokenomics upgrade with lock, boost, and revenue share!
Announcing the tokenomics upgrade
After three weeks of relentless coding, we are happy to officially announce that the ANGLE tokenomics upgrade is aimed to be released in the first half of January 2022! Contracts are currently being audited and in the meantime, the team is developing the UI where users will be able to lock their ANGLE to receive veANGLE, assign rewards on the different pools (gauge), and see stats about veANGLE.
This new tokenomics main benefits are:
- Introduces a new time variable for Angle stakeholders and decision makers, aligning their time-horizon better with which of the protocol. As a side-effect, the need to lock ANGLE for 1w to 4y to get veANGLE also reduces the token circulating supply and sell-pressure.
- Redistribution of a share of the interests generated by the protocol to veANGLE holders, giving them a native APR on their tokens.
- Boosting ANGLE rewards to veANGLE holders, while keeping emissions constant, allowing to distribute a bigger proportion of tokens to long-term stakeholders.
Conclusion
In the coming weeks, we will write more detailed articles on the different topics around the new tokenomics. This includes talking about the locking mechanism and its effect on the token price, the redistribution of interests, with estimation of the expected amounts in the first weeks, and the rewards boost.
We hope these changes will have a profound and positive impact both on the protocol and its community by increasing demand for the token and aligning incentives distribution with long-term commitments from holders.
