agEUR (Ethereum)
Angle Euro is a fully collateralized and credit-based stablecoin.
- Ethereum
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- Asset Type: ERC-20
- Market Cap: $20.1M
- Ranking inside Exponential (among stables): #27
- Circulating Supply: 18,665,802
- Total Supply: 18,665,802
- Volume (24H): $3.4M
- ATH: $1.20 (02/07/2022)
- ATL: $0.64 (03/15/2023)
agEUR is a low-cap, fully collateralized asset. This asset is exposed to the underlying risks of Angle, a protocol rated as Moderately Risky. agEUR is a credit-based stablecoin, meaning it is always overcollateralized. The asset has a fixed supply.
agEUR is a stablecoin that trades within 50bps of its peg to EUR, which makes it a less volatile store of value.
agEUR is a stablecoin that trades within 50bps of its peg to EUR, which makes it a less volatile store of value.
Angle
How does agEUR work?
agEUR can be minted by depositing whitelisted collateral assets like USDC or DAI into the Angle platform. The cost of minting is around 0.3%, a portion of which goes to standard liquidity providers (SLPs). Hedging agents (HAs) help to increase the protocol's capital efficiency by allowing it to transfer the collateral's volatility to external third parties seeking leveraged exposure. HAs are attracted to Angle due to its lack of funding rates as it only requires a single transaction fee. HAs deposit their own collateral to be long volatility between an agToken pair. The collateral in the system acts as a trade counterparty to the user seeking leverage and the HA's collateral provides insurance to the protocol against volatility. In the event that the protocol becomes undercollateralized, the SLPs act as the backstop mechanism to ensure 1:1 redeemability of agTokens. If SLPs were to choose to remove their liquidity in this scenario, they would incur a slippage (increases with decreasing collateralization ratio).
Why trade agEUR?
agEUR provides users with an alternative fiat currency that is pegged to 1 EUR. Angle has also integrated agEUR with several partners so that it can be used to pay and create invoices, as well as make fiat transfers to a user's bank account. agEUR can also be held as a treasury asset for a DAO or company seeking to diversify their crypto holdings. Users can further earn yield on their agEUR by putting it to work across DeFi.
How secure is agEUR?
Due to the design with the platform's two types of liquidity providers (HAs and SLPs), Angle is able to ensure agEUR is overcollateralized. However, agEUR can be at risk of undercollateralization when a sudden drop in the collateral price is combined with a severe drop in demand for leverage by HAs or there are not enough SLPs to serve as a backstop. It is noted that Angle does not need HAs to take on highly levered positions to be overcollateralized. Further, even if demand for leverage decreases, it is still likely cheaper than most alternative on-chain leverage protocols. SLPs are disincentivized to exit the system when the collateral ratio is too low through a slippage mechanism. There are also recollateralization incentives for SLPs. When the system is undercollateralized, a fraction of transactions and lending yield will automatically be put aside and can only be recovered by SLPs when the system is recollateralized.
