JIP-11 : launching staked jFIATs

Objective

To launch stkEUR (staked jEUR), a yield-bearing Euro stablecoin designed to act as an on-chain savings account for jEUR holders. This proposal aims to drive demand for jEUR by offering an attractive yield-generating option that enhances protocol revenue, while creating a model that can be expanded to other jFIATs.

---

Background

Yield-bearing stablecoins are popular in DeFi, pioneered by DAI’s Savings Rate (DSR) and followed by fiat-backed and crypto-backed alternatives such as USDM, USD0, sDOLA, and stEUR. By introducing stkEUR, our protocol can offer a Euro-based alternative that incentivizes long-term holding of jEUR and provides a competitive advantage in the euro-denominated stablecoin market.

Currently, the protocol generates revenue from several sources, including liquidity pools, wrappers, and DAO treasury operations. By selectively redirecting a portion of the revenue directly generated from jEUR usage to stkEUR holders, we can offer a stable, risk-free yield while preserving additional protocol revenue for future initiatives and growth.

In the future, if successful, this yield-bearing model could be expanded to other stablecoins, such as jCHF, jBRL, and the upcoming jUSD.

---

Proposal Details

1. stkEUR Mechanics:

   • jEUR holders can stake their assets to receive stkEUR, a yield-bearing version of jEUR.
   • Accrual and Yield: Yield will accrue from a portion of the revenue generated directly by jEUR usage in the protocol.
   • Collateralization: stkEUR can be used as collateral to borrow assets such as USDC or jEUR, increasing its utility.

2. Yield Sources:

   • Liquidity Pools: Collateral in protocol pools (primarily USDC, xDAI, and soon ETH) is lent on platforms like Aave v3 and Rmm v3. A portion of the interest from jEUR-related pools will be redirected to stkEUR holders.
   • Wrappers: Wrappers 2.0 will allow collateral from jEUR (EURC and EURE) to be lent on Aave and Morpho, generating yields that can partially be allocated to stkEUR holders.
   • DAO Treasury Operations:
     • Market Operations: The DAO can mint jEUR for lending on Morpho, provide liquidity, and conduct arbitrage in secondary markets to stabilize prices and liquidity.
     • Protocol-Owned Liquidity (POL): The DAO is an LP on Optimism (USDC-jEUR) and Aerodrome (JARVIS-ETH), where it earns revenue that can contribute to stkEUR yield.

3. Revenue Allocation:

   • Redirect 30% of the revenues from the pool, 80% of the revenues from the wrapper, and 80% of the revenues from lending jEUR on Morpho, to staked jEUR holders.
   • Additional revenues will be retained for the DAO treasury and other protocol initiatives.

---

Rationale

Introducing stkEUR supports the protocol's long-term sustainability by aligning with the DeFi trend of yield-bearing stablecoins. It will:

• Increase jEUR demand as it becomes a valuable yield-generating asset, attracting new users.
• Provide a yield-balancing mechanism across platforms, supporting protocol liquidity and stability.
• Expand stkEUR’s utility as a collateralizable asset, enhancing protocol activity and TVL.

This measured approach to revenue redirection preserves flexibility for future stablecoins, such as jCHF, jBRL, and jUSD, while allowing stkEUR to establish itself as a core yield-bearing asset within the protocol.

---

Stakeholders

• jEUR Holders: Gain access to a yield-bearing euro asset with no additional risk, simply by staking jEUR.
• Liquidity Providers (LPs): Benefit from increased jEUR demand, potentially driving more users to participate in liquidity pools.
• DAO and Treasury: Gains from stable revenue inflows while supporting a sustainable euro-based yield mechanism.
• Community and Token Holders: Increased engagement and utility within the protocol will drive stability and revenue growth, benefiting all stakeholders.

---

Metrics for Success

• Amount of jEUR Staked: Number of jEUR staked in stkEUR within the first three months.
• Yield Distributed Across Platforms: The overall yield distributed to stkEUR holders, aiding in balancing yields across different platforms.
• Circulating Supply of jEUR: Comparison of jEUR in circulation before and after stkEUR introduction, indicating demand.
• Yield Generated by Protocol: Total revenue generated from jEUR-related sources contributing to stkEUR yield.

---

Conclusion

The introduction of stkEUR will offer jEUR holders a competitive yield-bearing euro stablecoin, establishing the protocol as a leader in euro-denominated DeFi solutions. By selectively redirecting a portion of revenue from jEUR-related activities, stkEUR will provide sustainable yields while preserving resources for future expansion. This proposal aims to position stkEUR as a premier yield-bearing asset and set the stage for a potential rollout of similar assets for other stablecoins, such as jCHF, jBRL, and jUSD.

Voting Options:

• Yes: Approve the introduction of stkEUR with the proposed revenue-sharing model.
• No: Reject the proposal and maintain the current protocol structure.