AIP - 111 ANGLE Token Settlement - Airdrop Excess Equity to Holders

Hello,

This is a proposal to distribute the protocol's excess equity to Ethereum ANGLE holders through a Merkl airdrop.

Context

Activity on the Angle protocol has stalled, and the protocol has accumulated over the course of 4+ years significant excess equity that is not being actively deployed. Following the balance sheet simplification efforts and the veANGLE unlock, the protocol finds itself in a position where the ANGLE token no longer serves its original purposes.

Rather than letting this equity sit idle or be subject to future uncertainty, we propose to distribute it directly to ANGLE holders.

Important clarifications:

• This is not a settlement of EURA or USDA. Both stablecoins remain fully collateralized and tradable 1:1 with EURC and USDC respectively. The protocol retains over $4M in TVL and the stablecoins continue to operate normally.
• The ANGLE token will continue to be used for governance of the protocol, as ongoing management of the EURA and USDA stablecoins may require community oversight.
• The airdropped amounts have been computed leaving a simple margin to ensure the protocol remains over-collateralized

The excess equity available for distribution consists of:

• 3,548,221 USDC
• 2,276,733 EURC

The attached EURA and USDA balance sheets provide a detailed breakdown of the protocol's assets and liabilities for each stablecoin, showing how this excess equity was determined.

Proposal

The proposal is to airdrop using Merkl the excess equity to Ethereum ANGLE holders based on their balance at a snapshot taken 2 weeks after the vote concludes. This delay gives remaining holders time to withdraw their ANGLE from veANGLE (which they had more than a year to do already), exit liquidity positions (if any left), and consolidate their holdings out of some protocols that Merkl doesn't integrate, while keeping the window short enough to avoid excessive speculation and gamification on the ANGLE price.

Merkl has agreed to waive its fees for this distribution given the nature of the settlement.

The airdrop will be conducted from the protocol guardian multisig, and rewards will be claimable for a period of one year as per standard Merkl rules.

Excluded Addresses

To avoid notably forwarding issues and having rewards land on addresses where contracts or users cannot claim them, the following addresses will be excluded from the snapshot:

• Angle protocol addresses: this includes notably the governor multisig, the Angle Distributor contract and the labs multisig
• Liquidity pool contracts on Ethereum: UniswapV3, Sushiswap, and UniV4 pool contracts hold ANGLE as part of LP positions - the underlying LP token holders are the beneficial owners, not the pool contracts themselves, but as Merkl doesn't necessarily have forwarding setup for these, remaining LPs should withdraw their positions (it'll also help leaving liquidity for speculation)
• veANGLE tokens that have not been withdrawn
• ANGLE vesting contract: These tokens are not yet in circulation
• Wintermute exploiter address: To prevent rewarding the malicious actor from the historical exploit
• Bridge contracts: Polygon bridge and LayerZero bridge contracts notably -> holders of ANGLE on other chains should bridge back to Ethereum
• Votium smart contract: Rewards cannot be claimed from this contract, so including it would result in locked funds
• Any other protocol contract without Merkl forwarding support: Contracts where end users cannot claim rewards directly because Merkl forwarding is not implemented will be excluded to prevent funds from being locked

Implementation

1. If the vote passes, a snapshot of ANGLE balances on Ethereum will be taken two week after the vote concludes
2. The excluded addresses listed above will be removed from the distribution
3. Each eligible holder will receive a pro-rata share of the 3,548,221 USDC and 2,276,733 EURC based on their ANGLE balance relative to the total eligible supply
4. The protocol guardian multisig will set up the distribution on Merkl with a one-year claim window

Voting Options

1. For, proceed with the airdrop
2. Against, do nothing