Angle Protocol Integrates Gamma LP Positions

We are proud to announce that Angle Protocol will be integrating Gamma LP tokens for their ANGLE emissions gauges. In essence, users will be able to deposit into Gamma’s agEUR/USDC LP pair on both Mainnet and Polygon and earn ANGLE rewards.

What is Angle Protocol

Angle Protocol is the protocol issuing agEUR, which is a decentralized and over-collateralized stablecoin pegged to the price of the Euro. It is currently the most liquid Euro stablecoin on Ethereum and other chains.

How ANGLE Gauges Work

ANGLE gauges utilize ve-tokenomics, pioneered by Curve Finance, that allow ANGLE token holders to lock their tokens between 1 week and 4 years to obtain veANGLE (vote-escrowed ANGLE). veANGLE grants voting power to determine the allocation of weekly ANGLE rewards. veANGLE holders are able to vote for a variety of gauges, which are liquidity positions that involve agEUR. Those who provide liquidity to those gauges would then be able to claim their pro rata share of weekly ANGLE rewards according to the vote allocation.

See below for the current allocation of votes to different gauges:

New Uniswap v3 Gauges

On August 4th, 2022, a proposal was presented that would divide ANGLE rewards allocated to Uniswap v3 gauges to different Uniswap v3 liquidity providers and managers. Both Gamma’s and Arrakis’ LP positions were whitelisted as gauges to earn ANGLE rewards based on performance-based KPI metrics.

Previously, the Uniswap v3 gauges for agEUR-USDC and agEUR-ETH were controlled solely by Arrakis Finance (previously known as G-Uni). Under the Arrakis model, positions were not meant to be rebalanced frequently, so a “conservative” range of 1 to 1.33 was chosen. Unfortunately, due to macroeconomic factors, the value of the Euro fell to under 1 USD, causing their position to go out of range (see below).

As such, it became apparent that additional mechanisms were needed for rewarding Uniswap v3 positions that are in range and earning fees.

The computation for how the Uni v3 ANGLE rewards are now distributed is as follows:

• The weekly distribution is split against every swap that happened during the week proportionally to their volume.
• For each swap, the rewards are split between all LP positions in range, proportionally to: (0.4 * (fees earned by the position)/(fees of the swap) + 0.4 * (agEUR in the position)/(agEUR in the pool)+ 0.2 * (other token in the position)/(other token in the pool)) * veANGLE boost

The first factor has a 40% weight favoring a more concentrated and in-range position. The second factor also has a 40% weight favoring the preservation of agEUR in the pool. The last factor has a 20% weight which favors the preservation of the other token (i.e. USDC) in the pool multiplied by a veANGLE boost, given to those who are locking their ANGLE in addition to providing liquidity.

The final reward amount for each LP would be brought on-chain using a merkle root, and the rewards would be claimable weekly on the Angle Protocol front-end. Therefore, the total amount of ANGLE rewards allocated to agEUR/USDC LPs will be weighted more heavily to the LPs who maximize the KPI metrics.

Benefits to agEUR/USDC Liquidity Providers

We are currently managing both agEUR/USDC LP positions on Mainnet and Polygon in a way that favors fee generation and preserving agEUR in the pool as doing so would garner the most ANGLE rewards according to their KPI computation.

Additionally, the core reason behind Angle’s adoption of the new rewards mechanism for Uniswap v3 providers is to reward those who actively manage positions so that they are in range. Gamma prides itself on being one of the only active liquidity providers today that have automated rebalancing strategies. We will be running our dynamic range strategy which will set a tight range and automatically rebalance when certain price targets are met.

We are thrilled to have this partnership and integration with Angle Protocol, and look forward to potentially managing more agEUR pairs in the future on more networks.