Angle & Paladin To Utilize Liquidity-as-a-Service From Ondo Finance
Angle community approved a partnership with Paladin to utilize Ondo’s Liquidity-as-a-Service offering. This partnership will enable the use of $agEUR as liquidity for $PAL.
Angle will become the first project to utilize Liquidity-as-a-Service with a euro-pegged stablecoin. Angle’s approval follows an initial proposal by the Paladin community.
What is agEUR-as-a-Service?
agEUR-as-a-Service (agEUR-aaS) is a new offering from Angle and Ondo to make it possible for projects issuing tokens to increase liquidity on decentralized exchanges.
This offering complements the already existing Liquidity-as-a-Service program from Ondo as it introduces the ability to build liquidity in a Euro-denominated stablecoin. This will better meet the needs of European protocols who now have the choice between USD or EUR stablecoins.
With agEUR-aaS, a project can deposit its token into an Ondo liquidity vault with a fixed duration. Angle will match those deposits with an equivalent amount of agEUR to form a liquidity pair. In exchange for providing agEUR, the Angle DAO will receive a fixed APR return on its provided liquidity.
How will agEUR-aaS benefit Angle & Paladin?
With agEUR-aaS, Paladin will achieve twice as much liquidity from the same amount of capital. As noted in PGP-10, agEUR-aaS is an incredibly cost-effective form of liquidity:
Currently there is 5.26% slippage for a 25,000 USDC buy, 7.93% for a 50,000 USDC buy and 12.56% for a 100,000 USDC buy…[this partnership] will add $1.1M of depth, enabling $50k trades under 4% slippage and raising trade volume by creating a third pool to arbitrage…[this program will] quell a temporary delay in liquidity depth with a significantly cheaper budget than liquidity mining.
Paladin will benefit from PAL exposure to another DEX, in this case Uniswap v2, without the need for costly liquidity mining (LM) incentives in the form of mercenary liquidity in order to grow liquidity. Despite being costly, traditional LM dilutes token holders and increases sell pressure on the token.
With agEUR-aaS, Paladin can also retain all trading fees and capture the potential upside value of the trading pair. This reduces the risk of impermanent loss (IL) and often outstrips the cost of capital.
For Angle, the vault will provide a stable APR while removing the risk of IL. Their agEUR stablecoin will gain further liquidity via another token pair, as well as form part of only three pools that PAL is traded in. This partnership allows Angle to increase the utility of agEUR while earning revenue for the protocol.
Angle now sets the stage for further partnerships with other token issuers who wish to utilize agEUR-aaS to gain cost-effective liquidity in the form of agEUR.
About Paladin
Paladin is a decentralized governance lending protocol deployed on the Ethereum blockchain which enables users to loan voting power in their governance token, or borrow voting power.
About Angle Protocol
Angle is a decentralized stablecoin protocol predominately deployed on the Ethereum blockchain. It is used to issue stablecoins, called agTokens, and claims to be starting with “the first liquid Euro stablecoin on-chain”.
About Ondo Finance
Ondo Finance is building a decentralized investment bank. They are building software that finds attractive investments across the traditional and DeFi landscape, repackages these assets into easily understood risk/reward offerings, and then matches and offers these assets to both institutional and retail investors.
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