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Introducing stEUR

— 3 min read - by Angle Labs

Today, we are pleased to announce the release of stEUR on Ethereum, a Euro Savings solution, powered notably by the Real-World Assets the protocol has in the reserves behind agEUR. Initial yield is set to 4%, paid in agEUR, but it will be regularly updated based on the utilization of the contract.
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stEUR is out and bound to stay: here is everything you need to know about Angle new Euro savings solution!


4% yield, really?

Angle is currently earning a substantial revenue from agEUR borrowers and from its reserves. In particular, the protocol controls bC3M which is a tokenized representation by Backed of an ETF investing in short-term Euro government bonds accruing a 3.6% yield.

The core idea behind stEUR is that the protocol can automatically distribute to agEUR holders a portion of the earnings it is making.

Right now the protocol return over assets stands at around 1.6%. This means that for every agEUR in circulation, the protocol could offer a yield of up to 1.6%.

In a setup like stEUR where not all agEUR are in the stEUR contract, the protocol can technically afford to pay more than 1.6%. For instance, if only 50% of the agEUR in circulation are in the stEUR contract, the protocol could pay up to 3.2%.

Here it was voted that the protocol would set the yield so that 90% of the estimated earnings through the Borrowing module and the yield-bearing collateral assets are distributed to agEUR holders.

The yield formula available here provides an adaptation of the yield every week. As this product develops, we expect the stEUR to become the first fixed yield source onchain resiliently providing the Euro risk-free rate.

If you want to track exactly what's going on in the protocol reserves, how much the protocol is earning, how the savings rate is going to look like and make sure that this stEUR system does not print money out of thin air, you can check this revamped analytics we've been working on lately.

Earn instantly, no lockup

Regardless of the yield that is paid, stEUR comes with no upfront fees. There are no deposit or withdraw fees for using the contract, just like there are no lock or minimum deposit.

Getting stEUR to earn a Euro savings is as easy as staking agEUR in a smart contract on Ethereum.

One cool thing is that upon staking agEUR in the stEUR contract, you immediately start earning from your agEUR. If you deposit and withdraw after 1 block, you'll have accumulated 1 block divided by a year worth of rewards.

This sounds easy, but an interface is always better right?

Angle App enables swapping from any token to agEUR and then staking to stEUR in a single transaction.

The stEUR contract has been integrated by Odos aggregation solution, meaning you can also buy it from any token and with limited slippage from their frontend. Odos technology is what is used under the hood in the Angle app.

Risks and safety

The stEUR contract was audited by Code4rena.

The interesting thing with the stEUR contract is that there is no investment or composability risk when staking agEUR in it: money is not lent out or used in any fashion, and the principal deposited is always available for withdrawal.

As such, and beyond the very well known and straightforward staking smart contract risk, there are no extra trust assumption between owning agEUR and stEUR. The main risk here is to get lower returns than expected.

We have still prepared a page to communicate about a range of agEUR risks holders must be aware of.

Integrate stEUR

The launch of the stEUR contract is critical in the vision Angle is trying to push for, by laying down in a permissionless and fully transparent manner the foundations of a Euro risk-free rate onchain.

If you are looking to integrate the contract, you can check our developers guide here. Or if you want to explore new use cases with us, feel free to join our community Discord.

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