AIP - 112 EURA and USDA Wind Down

This is a vote to orderly wind down the EURA and USDA stablecoins of the Angle protocol.

Context

Activity on the Angle stablecoins has been steadily decreasing. On top of the surplus that will be airdropped to ANGLE holders, the protocol currently holds approximately:

• ~$2.41m in assets backing USDA (including ~$1.5m USDC)
• ~€5.3m in assets backing EURA (including ~€3.1m EURC/EURCV)

While the stablecoins remain fully collateralized and functional, maintaining an idle protocol indefinitely creates ongoing operational overhead and liability for a diminishing user base. Rather than letting the protocol languish, we propose an orderly wind down that gives all participants ample time to exit their positions with no haircut.

Proposal

Phase 1: Redemption Period (1 year)

Given that the existing smart contracts have been thoroughly audited and are battle-tested, we propose to keep them operational for a period of one year following this vote. During this time:

• EURA and USDA holders on all chains can bridge their funds back to Ethereum
• EURA and USDA holders can redeem their stablecoins 1:1 for EURC and USDC respectively through the Transmuter on Ethereum
• VaultManager position holders (for EURA) can close their positions and recover their collateral
• Integrations and protocols building on Angle have time to adapt and migrate

Important: After this one-year period, the protocol will cease active operations. EURA and USDA tokens will likely depeg from their target values as the redemption mechanism is discontinued.

Phase 2: Final Settlement (after 1 year)

Once the redemption period concludes, the protocol guardian multisig will:

1. For VaultManager positions: Recover all remaining collateral assets, swap them to cover outstanding vault debts, and airdrop any leftover collateral to the respective vault holders
2. For Transmuter reserves: Recover all remaining reserves from the Transmuter on Ethereum and airdrop them on a 1:1 basis to the remaining EURA and USDA holders on Ethereum. This means that users who did not bridge their EURA or USDA back to Ethereum during the redemption period will not be eligible to the airdrop
3. If the amount is significant (from $20k), allocate excess reserves to ANGLE holders based on their balance at the time taken for the airdrop of the excess ANGLE reserves for the protocol

Phase 3: Claim Period (additional 1 year)

Following standard Merkl unclaimed rewards rules, holders will have one additional year to claim their EURC or USDC from the airdrop.

This creates a total 2-year window for users to recover their funds.

Advantages of This Approach

• Full redemption with no haircut: All holders can redeem at 1:1 during the first year, and receive pro-rata reserves thereafter
• Extended time window: 2 years total gives ample time for all participants to act, including inactive holders and forgotten positions
• Reduced protocol liability: Orderly wind down eliminates ongoing operational risk and maintenance burden
• No rushed migration: Integrations have a full year to adapt before any changes take effect
• Audited infrastructure: Using existing battle-tested contracts for the redemption period minimizes smart contract risk
• Clear finality: Provides closure rather than indefinite maintenance of an idle protocol

Implementation

1. If the vote passes, the one-year redemption period begins
2. Protocol communications will clearly announce the wind down timeline
3. After one year, the guardian multisig will execute the collateral recovery and airdrop distribution
4. Merkl claims will remain open for an additional year
5. Any unclaimed funds after the full 2-year period will follow standard Merkl unclaimed reward procedures

Voting Options

1. For, proceed with the orderly wind down
2. Against, maintain current operations