Liquidity as a service partnership with Paladin through Ondo

TL;DR

This is a proposal to:

• mint 500,000 agEUR as part of the algorithmic market operations of the protocol
• lend these agEUR to Ondo DAO for it to be paired with PAL tokens for a duration of 3 month and for a 1% interest rate

Context

LaaS

Liquidity as a service consists in lending agEUR minted by the protocol as part of its algorithmic market operations. These agEUR are then matched to the governance token of the partnerring DAO to be put in a liquidity pool for a certain duration.

At the end of the program, lent agEUR can be redeemed by the protocol plus a fee decided upfront. The DAO gets the rest and assumes the impermanent loss on the pair.

There is a risk for the protocol if the price of the token of the DAO decreases by more than 75%.

Paladin

Paladin is a decentralized protocol specialized in the lending and borrowing of voting power across other protocols. It notably has a product called Warden to borrow veCRV voting power. They have recently made a LBP in which they launched their PAL token, and will soon release a product called Quest that will enable them to double down their offerings on Curve and later on any project that has a ve-model.

For more details about Paladin, you can look at their governance proposal or at the Snapshot vote they have created on their side.

Ondo

Ondo Finance offers decentralized structured products with multiple tranches with different levels of risk. They have expertise in separating the yield from LP positions into a senior tranche (e.g. Angle) getting what it brought + a pre-agreed yield and a junior tranche (Paladin) getting everything that's leftover.

Proposal

As detailed above, the idea is to lend 500,000 agEUR to Paladin for a 3 month program and a 1% hurdle rate (4% return on an annualized basis).

Paladin will take the impermanent loss on the PAL token, and they have announced that they could use their $1m treasury to make sure this program does not accure bad debt for the protocol

Implementation

This proposal will only be implemented if it is voted positively by Paladin DAO and by veANGLE holders. Ondo will be the tier of confidence to execute this, and to make sure that Angle DAO gets 505,000 agEUR at the end of the program.

Program could be settled after 3 months, before being rolled over (in which case there'll be a vote).

Overall, besides the (small) revenue for the protocol, this program creates use cases and lays the foundations for agEUR being one of the main tokens exchanged across many pairs in DeFi.

It's a first experiment in this regard to be followed with other partnerships with other protocols.

Vote Options

1. For, lend 500,000 agEUR to Paladin through Ondo
2. Against, do nothing

Note this proposal is created with proportional voting to allow liquid lockers built on top of Angle to spread their vote proportionally based on how their voters voted on their platform.