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Concepts Overview
The Core Concepts of Angle Protocol

๐Ÿ”Ž TL;DR

    Angle relies on three groups of stakeholders: stable seekers and holders, Hedging Agents and Standard Liquidity Providers.
    Angle can be used to issue multiple stablecoins, each with its own separate pools of backing collateral.

Three Groups of Stakeholders

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. Let's say that the price of wETH is 1000$, and the transaction fees 0.3%, then it is possible to swap 1 wETH for 997 USD stablecoins. Conversely, with 1000 USD stablecoins, if transaction fees are 0.3%, it is possible to get 0.997 wETH.
    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 Stakeholders

Generalization to Multiple Stable Assets

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. In the beginning, we will however start with just a stable Euro (then followed by a stable Dollar and stablecoins pegged to other currencies like GBP or CHF).
The idea in the protocol is that each stablecoin is independent from 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 pair DAI/agUSD. The same goes for standard liquidity providers. You can be a standard liquidity provider for just the agEUR stablecoin, but not for the agUSD stablecoin.
Angle's collateral pools are different from one stablecoin to another
Although this is unlikely to happen, if the stable USD fails for some reason, it implies nothing for the stable EUR.

Next โžก๏ธ

In the following pages, we will dive a bit more in-depth in the specificities of each stakeholder of Angle Protocol and explain in more detail how some essential bricks of the protocol work.
Last modified 11d ago