[BIP-154] Enable PAR-jEUR Stable Pool Gauge with a 2% cap (Polygon)

BAL Gauges
1

Summary:

Enable a Balancer gauge for the Polygon jEUR - PAR stable pool, coined 2eur (PAR).

PAR and jEUR are both crypto-backed Euros stablecoins. PAR is issued by Mimo Capital and jEUR by Jarvis Network.

Mimo Capital and Jarvis Network co-write the proposal and have already a history of incentivising together a 4eur and a 2eur (PAR) pools on Curve for more than a year. Mimo and Jarvis both want to migrate the 2eur (PAR) pool from Curve to Balancer.

References/Useful links:

Jarvis Network:

Link to:

Mimo Capital:

Link to:

Protocol Description:

Jarvis Network

Jarvis Network is an ecosystem of protocols and applications to bring decentralized finance to real use cases. Its first protocol, Synthereum, allows borrowing and exchanging synthetic fiat currencies (jFIATs) on multiple EVM-compatible networks.

The Synthereum protocol has four modules:

  • Liquidity Pools: exchange jFIATs back and forth for USD-stablecoins or other jFIATs without price impact at the Chainlink price feed.
  • Credit Lines: borrow jFIATs against various collateral types.
  • Wrappers: convert non-USD stablecoins for their jFIATs equivalent at a 1:1 ratio.
  • Printers: mint uncollateralized jFIATs for flash loans, seeding money markets, or liquidity pools.

Most jFIATs have a direct fiat on and off-ramp (Mt Pelerin, Suarmi) or indirect (Monerium, Paytrie, Transfero etc.), can be lent or borrowed on money markets (Aave, Midas, 0VIX), can be used for on-chain and off-chain payment (Request, Superfluid, Mt Pelerin) or for earning yield (Beefy).

Mimo Capital

Mimo Protocol is a Collateralized Debt Position (CDP) protocol deployed on Ethereum, Polygon and Fantom. The stablecoin (PAR) is decentralized (controlled by vMIMO holders), non-custodial, overcollateralized, and fully redeemable synthetic asset pegged to the Euro fiat currency.

Motivation:

The role of the 2eur (PAR) pool is to increase the stability of PAR (1), the on-chain liquidity of both PAR and jEUR (2), and connect the Mimo and Jarvis ecosystems (3). Together, these 3 points allow for building an European DeFi ecosystem.

  1. PAR peg: PAR is issued following the CDP model; if PAR trades below its peg, CDP owner are incentivised to buy PAR cheaper and repay their debt; if PAR trades above its peg, CDP owner are incentivised to borrow PAR and sell them at a higher price; since jEUR can be exchanged for USDC and ETH back and forth at the EURUSD and computed ETH/EUR Chainlink price feed and without price impact, arbitrages can be performed between the Balancer pool and the Jarvis Liquidity Pool to help maintain the PAR peg; so if PAR trades below or above its peg, anyone can perform an arbitrage without having to go through a CDP.
  2. On-chain liquidity:
  • PAR: since jEUR can be exchanged for USDC and ETH without price impact, then exchanging jEUR, ETH or USDC for any other token has the same price impact; users can swap PAR to jEUR and then to USDC or ETH to access the latter’s liquidity or vice versa. This considerably increases PAR liquidity.
  • jEUR: jEUR main liquidity source is the Jarvis Liquidity Pool (primary market); without entering too many details, if the pool performs well, it will increase the number of jEUR minted, which will increase the liquidity in our Liquidity Pools and our Wrappers, which is vital to us; also, it is essential to us to have more liquidity sources (secondary markets), and this is why we are launching this pool as well as other pools (jEUR-WETH, 2eur-bb-am-usd, etc.
  1. Connect ecosystems: the 2eur pool connects Mimo and its PAR (essentially a way to borrow Euros with various collateral) to the jEUR’s ecosystem, enabling multiple use cases.
  • Credit without FX risk: borrow PAR, swap for jEUR then off-ramp jEUR (Monerium, Mt Pelerin, etc.).
  • Leverage short on EUR/XXX: borrow PAR, swap for jEUR, redeem for ETH or USDC, and repeat.
  • DeFi on-ramp and off-ramp: jEUR has an indirect 0-fee fiat on and off-ramp through Monerium, and a direct fiat on and off-ramp through Monerium. This pool can help users to buy PAR with Euros or to sell PAR for Euros.

A few notes:

  • Jarvis LTD has started building positions in BAL, TETU and AURA. The Jarvis Network treasury (governed by the JRT token, which will soon be revamped using the ve-model, a new token called JARVIS, and an 80/20 JARVIS-ETH pool) is planning on building the same positions.
  • Jarvis LTD and the Jarvis Network treasury will both supply liquidity in the Synthereum Liquidity Pool. They will use up to 50% of the fees generated through the Liquidity Pools for vote incentives for veBAL, vlAURA, tetuBAL etc. (we have already done this successfully for a few months now on BNB Chain with Ellipsis / DotDot).
  • With Mimo Labs, we have been launching the 2eur (and 4eur) pool on Curve. The 2eur pool did a volume of $4M since August 2022, with a TVL of $0.5-$1M.
  • Moving forward, we will deploy a boosted pool using Midas whenever possible to avoid fragmenting the liquidity between AMM and money markets and earn higher real yield.
  • Finally, we will also deploy a 2eur (PAR) - bb-am-usd pool or a 2eur (PAR) - 2eur (agEUR) - 2eur (EURT) - 2eur (EURe) - bb-am-usd pool depending on what would be the best for the liquidity and risk tolerance of LPs.
  • Mimo Labs has started building positions in AURA (locked as vlAURA) & BAL. Mimo Labs is currently working on a proposal for the Mimo Protocol to acquire AURA & BAL then lock them.
  • Mimo Labs will provide liquidity in the 2eur pool and use 100% of the generated fees for vote incentives veBAL, vlAURA, tetuBAL (Mimo Labs is also working on a proposal to whitelist their multisig for Balancer’s Voting Escrow. In the case where the proposal is accepted, 100% of fees generated will be locked for $veBAL instead of be used for vote incentives)

Specifications:

  1. Governance:
  • Jarvis: no on-chain governance (vote via snapshot) and decisions are executed through a ⅝ multi-sig (only one team member in the signers).
    • Polygon: 0x2709fa6FA31BD336455d4F96DdFC505b3ACA5A68
    • Ethereum: 0x2CA74be68f0A0e053F030D143C1376806BaBEdc9
    • Gnosis Chain: 0xaE1026699f47B1fC572D65E1784b12c3A2574A25
    • BSC: 0x38329F26a075D53324EFd6e5F53869354Fa1cfBc
    • Avalanche: 0x2507A0d8E2aBe9464Ba2d9ddcA38A5ee5e60A434
    • Optimism: 0x40bd131fA9933D592344783E38f0c0F27767d9FA
  • Mimo Capital: no on-chain governance (vote via snapshot) and decisions are executed through a ⅝ multi-sig (4 team members and 4 dao members elected by vMIMO holders).
    • Polygon: 0x2046c0416A558C40cb112E5ebB0Ca764c3C5c32a
    • Ethereum: 0x25Fc7ffa8f9da3582a36633d04804F0004706F9b
    • Fantom: 0x174162ddecE9d0b7B68fd945e38c3372C4C818ba
  1. Oracles: jEUR uses EURUSD and computed ETHUSD (ETHUSD / EURUSD) Chainlink price feed; PAR uses EURUSD, (Chainlink: EUR/USD Price Feed | Address 0x73366Fe0AA0Ded304479862808e02506FE556a98 | PolygonScan) Chainlink price feed.
  2. Audits:
  1. Centralizing vector: jEUR is mainly collateralized by USDC; PAR is partially collateralized by USDC (≈ 30%) and the ownership of the Mimo protocol and is held by a 5/8 multisig with 4 signers from Mimo Labs and 4 signers elected by vMIMO holders (Snapshot)
  2. Market history: jEUR has been live since August 2021 (on Polygon); it has never traded off its peg. PAR has been live since July 2021 (on Polygon); as PAR is soft pegged to EUR, it has been pegged to EUR 99.94% since the launch of the PAR on Polygon.
  3. Value:
  • The 2eur pool will act as the main route for arbitrages and the use cases mentioned above (on-chain liquidity, credit without FX risks, etc.).

Contracts

8 Likes
2

I think it is a very good proposal.
I think that having more liquidity in EUR - assets (jEUR and PAR) on Polygon is very important to have more possibilities against USD. Today, liquidity is so low, so there are a lot of frictions when you want to deal with stablecoins in EUR.

2 Likes
3

Agree 100% with jeugregg, time to make EUR stables great again

2 Likes
4

Glad to see so much enthusiasm, don’t hesitate to ask me more information about Mimo !

1 Like
5

Multisig Payload PR:

6

https://snapshot.org/#/balancer.eth/proposal/0x7ead645265119d556f763f4b3ccc7909118e41ee3643da8258a6ff76bbf8dc9c