Angle - 82%

Tech Review February 15, 2022

Ryan John Barcelona avatar
Written by Ryan John Barcelona
Updated over a week ago

Angle is an over-collateralized, decentralized and capital-efficient stablecoin protocol. It offers full convertibility between stable assets and collateral at oracle value: you can swap 1 of collateral against 1 of stablecoin and conversely, making the protocol both capital efficient and highly liquid. The Angle protocol relies on three types of agents, which all benefit from Angle to make a stablecoin stable:

● Stable Seekers or Users: they can swap collateral against stable assets and conversely swap stable assets against a whitelisted collateral of their choice at oracle value and with no slippage. They pay small transaction fees when they mint and/or burn.

● Hedging Agents (HAs): they get leveraged positions with the multiple of their choice on a pair collateral/stablecoin in the form of perpetual futures. By doing so, they insure the protocol against the volatility of the collateral. On the one hand, if the price of the collateral they contribute to increases with respect to the value of the stablecoin, they can make leveraged capital gains, but on the other hand, if the price decreases, they can lose a portion of the collateral they initially brought.

● Standard Liquidity Providers (SLPs): they lend money to the protocol and in return get part of the transaction fees induced by stable seekers minting and burning, as well as part of the returns made from lending some of the protocol reserves to lending protocols (like Compound or Aave). For Angle, they serve as the insurance of the insurance that is made up of HAs. They may face a small slippage when they exit if the protocol is not well collateralized.

Angle's design can be used to issue multiple stablecoins, provided that there is an oracle for that. Angle could for instance build a token which market value is designed to remain equal to the temperature in New York City. The protocol has started with the agEUR (Euro stablecoin), and the idea is to follow with stablecoins pegged to other currencies like agGBP, or agCHF.

The idea in the protocol is that each stablecoin is independent of other stablecoins, meaning that the collateral pools are different in all cases. Being a Hedging Agent for the collateral DAI used to back Angle's agEUR implies nothing about being a Hedging Agent on the pool DAI/agCHF. The same goes for standard liquidity providers. You can be a standard liquidity provider for just the agEUR stablecoin, but not for the agCHF stablecoin.

Angle protocol proposes a new approach and tries to make the best of centralized and decentralized protocols, as well as of over-collateralized and under-collateralized approaches. Angle is a decentralized version of centralized protocols, allowing swaps at oracle value between synthetic assets and collateral. The protocol issues perpetual futures to remain insured against the volatility of the collateral held in reserves.

The idea with Angle is to enable the spread and democratization of digital stable assets pegged to Euro and other fiat currencies, and to be a building block of tomorrow’s DeFi and bankless society. Angle plans on creating stablecoins for almost all Forex currencies, including the US Dollar, which could open a wide range of use cases.

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