[BIP-599] Enable Gauge for PAR/EURA pool with a 2% cap (Ethereum)

BAL Gauges
1

PR with Payload

Summary:

Enable a Balancer gauge for the PAR/EURA (ECLP-PAR-EURA) E-CLP with a 2% cap on Ethereum.

PAR is crypto-backed Euro stablecoin issued by the Parallel Protocol.

EURA is crypto-backed Euro stablecoin issued by the Angle Protocol.

The pool is an Elliptic Concentrated Liquidity Pool (E-CLP). E-CLPs are custom pools from Gyroscope built on top of Balancer’s pool architecture. They enable trading along the curve of an ellipse. This pool type is ideally suited for stablecoins and liquid staking tokens; is typically more capital efficient and could thus generate significant trading volume.

References/Useful links:

Parallel Protocol (prev. Mimo Protocol):

Link to:

Angle Protocol:

Link to:

Protocol Description:

Parallel Protocol

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

Angle Protocol

Angle is a decentralized and over-collateralized stablecoin protocol composed of smart contracts running on open blockchains. It can be used to issue stablecoins designed to maintain the value of the assets they are pegged to.

EURA (previously agEUR), pegged to the value of the Euro - €. EURA holders can stake their stablecoins for stEUR in order to earn a native € yield.

Motivation:

The role of the PAR/EURA E-CLP pool is to increase the stability of PAR, the on-chain liquidity of both PAR and EURA, connect the Parallel and Angle ecosystems.

The capital efficiency of E-CLPs will help to quickly increase the liquidity for PAR & EURA. This hub-and-spoke network will enable a more liquid secondary market for PAR & EURA to make it easier to exit from/ enter into PAR & EURA.

By using E-CLPs a comparably small amount of initial capital can provide a disproportionately deep market for PAR & EURA. The E-CLP’s efficiency gains are possible due to:

  • Customizable liquidity profiles: Using the curve of an ellipse enables highly customizable liquidity profiles. E-CLPs can be calibrated to approximate most trading curves that would be desired. E-CLP curves can be tailored to have certain regions of low price impact and other regions of high price impact.
  • Price bounds: The E-CLP concentrates liquidity within price-bounds that enable the E-CLP to be highly capital-efficient. Functionally, this works by enabling arbitrary truncation of liquidity profiles from a given trading curve. In effect, the capital efficiency comes from bounding the trading curve to an expected trading range of the assets.

A few notes:

  • PAR (the Parallel EURO stablecoin) already have a gauge on Balancer Polygon: 2eur (PAR)
  • paUSD (the Parallel USD stablecoin) already have a gauge on Balancer Ethereum: e-cs-kp-USD
  • Mimo Labs has started building positions in AURA (±557k $vlAURA) & BAL and the Parallel Protocol treasury currently holds 23k $vlAURA.
  • Mimo Labs is still buying AURA which will be locked to incentivize the liquidity.
  • MIMO (the Parallel governance token) already gauges on Balancer Ethereum & Polygon: p-MIMO/WETH 80/20 / MIMO/WETH 80/20

Specifications:

  1. Governance:
  • Parallel Protocol: none 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 PoS: 0x2046c0416A558C40cb112E5ebB0Ca764c3C5c32a
    • Ethereum: 0x25Fc7ffa8f9da3582a36633d04804F0004706F9b
    • Fantom: 0x174162ddecE9d0b7B68fd945e38c3372C4C818ba
  • Angle Protocol: The Angle DAO is controlled by veANGLE holders through onchain votes. Angle governance enables the community of veANGLE holders to propose, vote, and implement changes through the administrative smart contract functions of the protocol.
  1. Oracles:
  • Parallel: PAR uses EURUSD chainlink price feed and mainly uses Chainlink price feeds for all its collateral assets.
  • Angle: agEUR uses EURUSD Chainlink price feed.
  1. Audits:
  1. Assets & Centralizing vector:
  • PAR has a debt limit on each collateral, is partially collateralized by USDC (≈ 30%) and the ownership of the Parallel protocol and is held by a 5/8 multisig with 4 signers from Mimo Labs and 4 signers elected by vMIMO holders.
  • EURA: is overcollateralized (details here). The Angle DAO is controlled by veANGLE holders through onchain votes and is responsible for parameters tuning, deploying new stablecoins, accepting new collateral types for a given stablecoin, for treasury management and for protocol upgrades and integrations
  1. Market history:
  • PAR has been live since April 2021 (on Ethereum); PAR is soft pegged to EUR
  • EURA: (previously agEUR) has kept a tight peg since its launch.
  1. Value:
  • The PAR/EURA E-CLP pool will act as the main route for arbitrages and the use cases mentioned above (on-chain liquidity, etc.).

Contracts

Technical Specifications

The Balancer Maxi LM Multisig eth:0xc38c5f97B34E175FFd35407fc91a937300E33860 will interact with the GaugeAdderv4 at 0x5DbAd78818D4c8958EfF2d5b95b28385A22113Cd and call the addGauge function with the following arguments:
gauge(address): 0x597AEbfe41dCc042db206Eb888c42560a22c9303
gaugeType(string): Ethereum

The Balancer DAO Multisig 0x10A19e7eE7d7F8a52822f6817de8ea18204F2e4f will interact with the Authorizer 0xA331D84eC860Bf466b4CdCcFb4aC09a1B43F3aE6 calling grantRole with the following arguments:
role: 0xae60dce27f51ce5815357b9f6b40f200557867f8222262a1646c005d09b7dfba
This role corresponds to setRelativeWeightCap(uint256) on mainnet gauges and can be confirmed here balancer-deployments/action-ids/mainnet/action-ids.json at de8c3a52cb62185469dbbc90589afa83e5490760 · balancer/balancer-deployments · GitHub.
account: 0x10A19e7eE7d7F8a52822f6817de8ea18204F2e4f

The Balancer DAO Multisig 0x10A19e7eE7d7F8a52822f6817de8ea18204F2e4f will interact with the AuthorizerAdaptorEntryPoint at 0xf5dECDB1f3d1ee384908Fbe16D2F0348AE43a9eA and call performAction with
target: 0x597AEbfe41dCc042db206Eb888c42560a22c9303 being the PAR/EURA root gauge and data 0x10d3eb0400000000000000000000000000000000000000000000000000470de4df820000 to set the cap to 2%
The Balancer DAO Multisig 0x10A19e7eE7d7F8a52822f6817de8ea18204F2e4f will interact with the Authorizer 0xA331D84eC860Bf466b4CdCcFb4aC09a1B43F3aE6 calling revokeRole with the following arguments:
role: 0xae60dce27f51ce5815357b9f6b40f200557867f8222262a1646c005d09b7dfba
account: 0x10A19e7eE7d7F8a52822f6817de8ea18204F2e4f to revoke the previously assigned role to change gauge weights.

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https://snapshot.org/#/balancer.eth/proposal/0x4fcd74418d818919626e8678d6aae58a7294aa0826ef66fa77814a70f18173fe

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