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Learn more about Angle Savings System |
Angle Savings system is an addition to the Angle Protocol that allows any stablecoin holder to earn savings, paid in stablecoins.
Angle stablecoins do not automatically earn a yield, rather these must be staked in some specific contracts (potentially available on different chains) in order to start earning.
The yield that is allocated through these contracts is generated by the assets held by the Angle Protocol across its different modules:
- as part of its different Transmuter deployments, the protocol holds yield-bearing collateral assets.
- through its Borrowing module, the protocol collects yield from the interest rates paid by stablecoin borrowers
- through its lending algorithmic market operations, the protocol also earns a yield on people borrowing minted stablecoins
{% embed url="https://www.youtube.com/embed/9LKDbLzNYdU" %}
{% hint style="info" %} On Angle Analytics, it's possible to track how much a year the protocol is collecting across each collateral asset, its estimated yearly yield earnings and the current savings rate for supported stablecoins. {% endhint %}
Angle Savings system is designed so that the protocol never allocates more than what it generates.
The yield rate that is paid by Angle savings system on a stablecoin depends on the return over assets the protocol is generating for this asset. Assuming all stablecoins are in Angle savings contracts, and assuming no cut taken by the protocol, the protocol could pay up to this return over assets to all stablecoin holders.
As in normal times, not all stablecoins are in savings contracts, the protocol can allocate more than its return over assets to stablecoin holders. As such, by entering into Angle Savings system, you're earning a multiplier on the yield the protocol is collecting on its reserves for this stablecoin.
Practically, the yield rate for a given stablecoin is defined such that:
The parameter y is the max rate that can be set and x is a buffer that the protocol is taking.
Equivalently, this formula above can be rewritten in terms of return over assets and utilization of the savings contract:
For all Angle stablecoins, the parameters chosen are y=10% and x=0.9.
The rate schedule above cannot be implemented automatically in a non manipulative way, and Angle relies on its governance to enforce it.
While only governance addresses can set the maximum rate (y) value, the guardian multisig can update the rate of the savings contract under the following conditions:
- last rate update was at least 7 days ago
- or, the current rate is too high and causing the protocol to lose money based on the current utilization of the savings contract. Formally the condition for the guardian multisig to intervene in this case writes:
$$\texttt{contract rate}\times \texttt{stablecoin.balanceOf(savings contract)}_t \geq \texttt{Protocol yearly yield earnings}_t$$ - or, the rate based on the schedule would be different from the current rate encoded in the contract by 0.5%. This writes:
$$|\min(x\times \frac{\texttt{Protocol yearly yield earnings}}{\texttt{stablecoin.balanceOf(savings contract)}},y) - \texttt{contract rate}| \geq 0.5%$$
{% hint style="info" %} If you're looking to build on top of Angle Savings contracts, check out this guide from our developers documentation. {% endhint %}
Angle Savings contracts are simple ERC4626 contracts, which means that upon staking an Angle stablecoin in a savings contract you receive a classical ERC20 token that can then be transferred, staked, lent or used in any way you want.
The value of these tokens is not designed to remain pegged to their respective underlying asset, but increases over time as yield accrues to it. Angle staked tokens are yield bearing and not rebasing and the exchange rate between Angle stablecoins and their staked equivalent is encoded in the savings smart contract.
While you may be able to acquire Angle staked tokens on DEXes, there is no need to, and depositing Angle stablecoins can be done without any slippage directly with the staking smart contract.
This system comes with no deposit or withdraw fees. And upon depositing in it, you immediately start earning. For instance 1 EURA deposited in a savings contract and withdrawn after a 12s block would have earned the equivalent of 12s of the yearly rate encoded in the contract.
{% hint style="info" %} Angle App is an example of frontend that supports depositing directly and with no slippage into the contract, provided that you are coming with the stablecoin. Check out the guide for using Angle savings solutions with the Angle App here. {% endhint %}