Angle Labs Secures $5 Million to Revolutionize Stablecoins

Angle Labs Secures $5 Million in Funding for Euro Stablecoin Development

Angle Labs, the firm developing the Angle Protocol, has successfully completed a $5 million funding round. Leading the investment is Andreessen Horowitz, demonstrating significant confidence in the project.

The company, comprised of a focused team, is dedicated to creating a euro stablecoin built on the Ethereum blockchain.

Investor Participation

In addition to Andreessen Horowitz, the funding round saw participation from several prominent investors. These include Fabric VC, Wintermute, Divergence Ventures, Global Founders Capital, Alven, Julien Bouteloup, and Frédéric Montagnon.

The Genesis of the Project

According to Angle Labs co-founder Pablo Veyrat, the project originated from a personal experience with foreign exchange risk. “I noticed substantial euro/dollar exchange rate exposure while using Compound,” Veyrat explained. “The euro experienced a 10% devaluation against the dollar in 2020.”

Currently, several euro-denominated stablecoins exist, but their market capitalization remains comparatively small when contrasted with USD-based alternatives like USDC, USDT, and DAI.

Protocol Design and Functionality

Rather than relying on traditional banking solutions for euro holdings, the Angle Labs team has engineered a novel protocol. This protocol incorporates three distinct stakeholder groups, each with unique objectives.

Individuals seeking a digital euro representation will be able to acquire agEUR. The protocol aims to maintain a 1:1 peg between agEUR and the euro at all times.

To ensure the long-term stability of Angle’s stablecoins, the protocol accepts collateral in the form of other stablecoins, as well as cryptocurrencies like (wrapped) Bitcoin and Ether (wBTC, wETH, etc.).

Incentivizing Participation

The protocol issues perpetual futures as an incentive mechanism. This allows traders to establish leveraged positions, anticipating returns on their investments.

These traders effectively cover potential capital gains or losses incurred by other users of the protocol.

Maintaining Over-Collateralization

However, relying solely on futures isn’t sufficient to guarantee consistent over-collateralization within the Angle protocol.

Therefore, a third agent type is integrated: liquidity providers. These providers can deposit assets and earn interest, while their deposits simultaneously function as collateral for the protocol.

Scalability and Future Plans

The resulting architecture is a complex, over-collateralized system adaptable to various underlying assets, not limited to EUR stablecoins.

The initial launch will feature two new crypto assets: a EUR stablecoin (agEUR) and a USD stablecoin (agUSD). Both will be redeemable against a range of collateral options and are expected to integrate with other DeFi protocols.

Angle Labs has further plans to introduce stablecoins pegged to the Swiss Franc, British Pound, Japanese Yen, and Korean Won.

The protocol is currently undergoing testing and has been audited by both Chainsecurity and Sigma Prime. A mainnet launch is anticipated in October, pending successful completion of these phases.