[BIP-XXX] Enable jEUR-EURS Gauge [Polygon]

BAL Gauges
1

Summary:

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

EURS and jEUR are both Euro stablecoins. EURS is backed by Euros and issued by Stasis, and jEUR is backed by crypto and is issued by the Jarvis Network.

Jarvis Network writes the proposal. We have already a history of incentivising the 2eur (EURS) pool on Curve, and we want to move the pool on Balancer.

References/Useful links:

Jarvis Network:

Link to:

Stasis:

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 (Stasis, 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).

Stasis

STASIS is a European financial technology firm that develops customer-friendly instruments to enable institutional and retail customers to manage digital currencies and public blockchains for payments and settlements, e-commerce, and DeFi.

The company issues, governs, and manages EURS, a blue-ribbon asset among euro-backed stablecoins, originated in the heart of the EU fintech sector — Malta. Over time, STASIS has become one of the largest non-USD stablecoin issuers, with EURS reaching a whopping $6B+ of transferred value to date.

EURS is the only euro-backed stablecoin today that enables multiple distributed ledgers and unique features not present in other assets. EURS has developed an in-house white-label API for crypto-to-fiat settlement in Europe with API infrastructure live on Ethereum, Algorand, Ripple, XDC, and Polygon, with several other blockchains in development.

EURS is audited by the top5 global audit firm and has accumulated the international community’s trust and accountability. Being totally transparent, STASIS makes investors confident that their digital assets are fully backed by the appropriate collateral, such as daily account statements, monthly verifications by BDO Malta, quarterly audits by BDO Malta, and on-demand verification for an onboarded entity.

Motivation:

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

  1. EURS peg: EURS tend to trade above or below its intended peg on Polygon; the main reason being that EURS on Polygon is not redeemable (it has to be bridged back on Ethereum), making arbitrages more complicated. The 2eur (EURS) pool would enable arbitrages to happen entirely on-chain.
  2. On-chain liquidity:
  • EURS: 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 EURS to jEUR and then to USDC or ETH to access the latter’s liquidity or vice versa. This considerably increases EURS 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.
  1. Connect ecosystems: the 2eur pool connects Stasis and its EURS to the jEUR’s ecosystem, enabling multiple use cases.
  • DeFi on-ramp and off-ramp: on Polygon, EURS is supported by Wirex, and can be exchanged for Euros to load the Wirex Debit card. EURS can also be bought on Wirex. EURS is also supported by several on and off-ramp services on Polygon such as Mt Pelerin. Users could swap any token for jEUR, then for EURS and load their Wirex Debit card by depositing EURS and selling it for Euros.
  • Credit without FX risk: borrow jEUR, swap for EURS then off-ramp EURS or deposit them into Wirex, enabling a credit line tied to a Debit card.

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) has a position in TETU.
  • 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).
  • The 4eur pool on Curve, that contains jEUR EURT and EURS did a volume volume of $100M since December 2021, and was incentivized between December 2021 and July 2022, with a TVL that went up to $9M (today it has $25k left and still has activity).
  • 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 (EURT) pools.

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
  • Stasis has no on-chain governance.
  1. Oracles: jEUR uses EURUSD and computed ETHUSD (ETHUSD / EURUSD) Chainlink price feed; (Chainlink: EUR/USD Price Feed | Address 0x73366Fe0AA0Ded304479862808e02506FE556a98 | PolygonScan 1) Chainlink price feed.
  2. Audits:
  1. Centralizing vector: jEUR is mainly collateralized by USDC; Stasis is backed by Euros.
  2. Market history: jEUR has been live since August 2021 (on Polygon); it has never traded off its peg. EURS has been live since May 2022 (on Polygon); as Stasis can be minted/redeemed against Euros, it has held its peg even though its low liquidity creates stability issue time to time (always arbed).
  3. Value:
  • The 2eur (EURS) pool will act as the main route on and off-ramp on Polygon for European users using Wirex and Mt Pelerin, and main route for arbitrages and the use cases mentioned above (on-chain liquidity, credit without FX risks, etc.).

Contracts

  • 2eur (EURS) Balancer Pool (Polygon): 0x02559a4fa0F3dAe55820a65eb48B7a2fCD82f361 (AMP 200; trading fees 0.05%).
  • jEUR token (Polygon): 0x4e3decbb3645551b8a19f0ea1678079fcb33fb4c
  • jEUR (Polygon Synthereum Liquidity Pool): 0x65a7b4Ff684C2d08c115D55a4B089bf4E92F5003
  • EURS token (Polygon): 0xE111178A87A3BFf0c8d18DECBa5798827539Ae99
  • Gauge: 0x203Ec46393b59aBFc18366DcfE798316Be72239C
2 Likes
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I’ve recently looked into EURS and found several critical issues that would require further clarification. Here are the key findings:

  • EURS is a centralized euro stablecoin controlled by Stasis, a company registered in Malta and the Isle of Man under STSS Limited. It is the largest euro stablecoin with a supply of approx. 47m euros, and the one with the most token holders (≈ 5,000).

  • Token supply (mint, burn, freeze, and transfer) is controlled via a 3-of-7 multi-sig whose signers are not publicly known. Authority over the signers is also undisclosed.

  • Stasis claims that EURS is backed 1:1 by cash reserves and sovereign and corporate bonds. Our verification shows that assets are held with the following entities: EXT LTD (Cyprus), XNT LDT (Malta), and UAB NexPay (Lithuania).

  • Although statements showing account holdings are provided, Stasis does not recognize unrealized P&L from daily variations of the underlying bond prices. Our analysis shows that all bonds most recently held had been trading at a significant discount compared to Stasis’s cost basis. This represented a plausible risk of insolvency in the event of a bank run.

  • Stasis voluntarily rebalanced to 100% cash accounts during the course of our investigations. Questions remain whether a cash infusion was required after the bond portfolio liquidation to maintain the EURS collateralization ratio.

  • Regulatory compliance of Stasis and its associated entities and partners remains to be determined. EURS submitted its registration application to the Malta Financial Services Authority (MFSA) to become registered as a Virtual Financial Asset Token Issuer. However, the current setup is unsustainable as Stasis does not have complete control over the e-money liquidity.

The full report is accessible here: Asset Risk Assessment: Stasis - LlamaRisk

1 Like
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Hi 0xValJohn,

thanks a lot for your feedback! very detailed and very insightful. I am transferring it to Stasis so they can address your points.

1 Like
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Dear Balancer community,

We welcome everyone to express their support or concern.

A few weeks ago, our team decided to take another step forward and explain how each part of the equation works to avoid doubts, misleadings, or delusions regarding STASIS EURO.

We addressed the main points the LlamaRisk research team highlighted in their latest risk assessment.

In order not to publish a mile-long post here, we encourage everyone to check our Medium channel:

STASIS EURO Demystified. A Detailed Response to EURS Risk… | by Krypto Walker | STASIS Blog | Mar, 2023 | Medium.

Moreover, don’t hesitate to read these articles that perfectly emphasize our approach to transparency:

Thanks for your continuous support. We are open to feedback.

5

Dear @StasisTeam,

Our main concern is how you have disposed of all the bonds at once, and who covered the mark-to-market losses as all of these bonds were underwater. I think providing some transparency on this would go a long way in restoring confidence in EURS.