In this episode, Anton from Holyheld sits down with Pablo from Angle Protocol.

Angle protocol is centered around the agEUR, a decentralized European stablecoin. It is over-collateralized, ensuring there are always more assets behind the stable than in circulation. Functioning akin to a traditional bank, Angle features a deposit facility where users can deposit funds and mint agEUR against other stablecoins. Additionally, users have the option to borrow against their crypto holdings. A recent addition to the platform is a savings solution enabling users to earn under agEUR.

AgEUR aspires to be more than just a stablecoin or unit of account; it serves as a gateway to DeFi, facilitating financial access throughout Europe. With agEUR users can easily navigate among ten different interconnected chains and swap between stables through a high-volume pool. Its composability empowers users to build various use cases around agEUR and the euro stablecoin market.

The traditional mindset of receiving payment in euros and spending euros is evolving as Europeans recognize the mismatch with being paid in a USD stablecoin while incurring expenses in euros. People do not typically think about the currency they transact in. Crypto and DeFi are global, and everyone, even Europeans, price things in US dollars. DeFi natives are used to dollars. It was the standard this industry was built around.

A shift is occurring where Europeans are realizing it doesn't make sense to be paid in a USD stable when all their expenses are denominated in euros. Currently, on some sites, you can view a USD value, and if you swap to see the euro value, the site applies the USD <> EUR exchange rates. So the price is the denomination displayed in USD terms rather than a direct feed of BTC <> EUR. This is where AgEUR comes in because it allows Europeans to take advantage of DeFi without having to worry about the exchange risk.

There are very few successful stablecoin protocols. You have to understand how the arbitrage makes a stablecoin stable and has ample liquidity. A stable is like a standard, nobody has incentives to use a standard unless others use it. It's the hardest part of a decentralized protocol and a very chicken + egg issue. If a protocol relies on governance token incentives that help in the short term, they can be lulled into the false sense of thinking that people are using the protocol because of demand vs the incentives. If the token incentives are removed, how do you make everything sustainable? For agEUR, the savings solution is self-sustainable and can pay out euro yield in a predictable manner.

Within this industry, there is a need for safety and transparency. Protocols should be able to scale without relying on Ponzi mechanisms and will need to adapt over time. Upgradability, in this case, is better than immutability. With immutability you have one chance to deploy, and a malicious actor has infinite time to try to exploit it. By making the simplest building blocks immutable, it lays the groundwork for protocols to build upon. Earlier, we compared stablecoin protocols to a bank: to continue that analogy, upgradability allows for flexibility to accommodate the frequent monetary policy changes based on macroeconomic conditions and the traditional finance ecosystem.

Transparency and investor protection are more important in these layers than immutability. DeFi, when used in this way, could allow for increased “visibility” which would give users ample time to prepare, adjust, or leave the system if they’re not aligned with future policy updates. TLDR: Liquidity changes and the rules change. The goal is for agEUR to be used for security and the advantages it provides vs traditional finance. Pairing Angle’s agEUR with Holyheld allows euro users to pay for daily life with onchain euro denominated funds. It is a synergistic relationship that will help to foster the utility of DeFi across Europe.

Pablo’s response to Anton’s famous question about the tool or service that would make financial life or personal life easier was: an aggregator. Right now you have to KYC at different banks and payment institutions, it would be great to have one place that shows all of your assets across banks and onchain, leverage fragmentation of liquidity and institutions. It is important to have liquidity across different banks and platforms to help diversify risk, but then you need to reconcile it to properly account for everything.

Ending notes reflecting on what could have been done differently through the years: speaking up more loudly against people who are bad actors. With scams, you have one person doing bad things that affect the whole perception of the industry. But you also have people who are working on the hardest problem on earth trying to make finance better for everyone in the world.