A New Angle for Stablecoin Protocol: Unveiling NearPad x Angle Protocol Partnership
As DeFi is moving mainstream, a wide variety of projects are refining and improving protocols in this environment. Developed as an alternative to financial instruments in the traditional stock market, DeFi enables investors to find more desirable investment opportunities. DeFi is a growing ecosystem of tools, payment systems and platforms that operate on the Ethereum blockchain.
Stablecoins have been particularly effective in smoothing demand/supply dynamics and de-risking the space while broadening its reach. Stablecoins are an innovation that mitigates most of the volatility of crypto, something that makes it a strong contender for use in everyday life. They’ve also been instrumental in allowing users to transact with cryptocurrency across geographies almost instantly through on-chain settlement.
The demand for stablecoins has grown from $1 billion in 2018 to over $160 billion today. However, unlike the decentralised foundation, it has been issued on, the most used stablecoins are controlled by centralised entities, posing a regulatory risk and creating a point of failure for decentralised applications. Decentralised stablecoins have the potential to eliminate counterparty risk. Unfortunately, most of the current offerings have been plagued by complex logistics for minting and burning, capital inefficiencies for stabilising the protocol, and liquidity crisis.
Then, there’s the Euro question.
Currently, there is no decentralized protocol dedicated primarily to building Euros, and most who offer Euro minting do so with restrictions and limitations on their convertible value. Most lending and CDP protocols do not support Euro-pegged stablecoins, making it extremely difficult for Europeans to fully leverage these protocols due to the exchange risk associated with it.
To solve this problem, Angle has built a novel protocol.
New Money, New Angle
Angle is a brand-new protocol that leverages the ease and accessibility of centralized protocols without compromising on the decentralization of the protocol. Implementing the robustness of over-collateralized designs, while maintaining the efficient capital structure of under-collateralized designs, Angle eliminates the challenges of existing models by allowing users to swap stablecoins and collaterals with no slippage cost. This means users can swap their assets at a true 1:1 ratio through the protocol’s unique insurance model against volatility.
Angle insures itself against fluctuations through Hedging Agents. Hedging Agents are actors willing to take advantage of the volatility of collaterals, gaining direct exposure to perpetual futures via the protocol. However, assuming that Hedging Agents will always provide cover for the protocol is technically flawed. This is why Angle is backstopping its Hedging Agents with Standard Liquidity Providers (SLPs)
SLPs serve as an additional layer of protection for the protocol, helping to secure it in situations where Hedging Agents do not adequately protect collateral. SLPs earn yield for the liquidity they deposit on the protocol with their only risk exposure for them being slippage cost should they wish to withdraw when the protocol lacks sufficient collateral.
To further enhance liquidity and lending interest for SLPs, Angle implements lending strategies for its reserve, optimized for the highest returns.
So far the Angle Protocol has launched agEUR, its Euro stablecoin backed by DAI, USDC, FEI and FRAX. In just two months, agEUR has become the biggest Euro stablecoin in the market. Angle will also support a wide variety of stablecoins, backed by different collateral types.
The NearPad Angle
With the recent growth on Aurora, NearPad is thrilled to be working with Angle to bring its Euro stablecoin, $agEUR, and governance token, $ANGLE, into the NEAR/Aurora ecosystem. This partnership will also mark the launch of our new, dual incentive pool where liquidity providers will be able to earn rewards in two different tokens — in this case, $PAD and $ANGLE.
The dual reward pool is now and can be found in the 2x Reward Farm Section.