Proposers: Hubert, Lior
Summary
Angle has deprecated their veANGLE tokenomics and is now in the process of enabling unlocks. This proposal seeks governance approval for unlocking the ANGLE controlled by the sdANGLE locker, facilitating redemption for sdANGLE holders and proposing a compensation for the missing fees for the DAO due to the Angle’s team off-chain distributions bypassing normal reward distribution channels.
This proposal ensures legal and regulatory alignment, transparency, and compliance with Stake DAO’s governance framework.
Governance Compliance
The proposed unlock and redemption process is grounded in the following legal and governance principles:
- Stake DAO Governance Authority:
This proposal adheres to the governance structure outlined in previous governance proposals (notably SDGP-38), which allows Stake DAO to impose and collect fees on yield generated by liquid lockers.
- Token Holder Rights:
sdANGLE holders have an interest in the ANGLE tokens held within the locker. Given that veANGLE has been deprecated, Stake DAO has a duty to facilitate an orderly redemption process in compliance with DAO governance.
- Regulatory Compliance:
This proposal is structured to ensure it does not constitute a securities offering nor a financial service under applicable EU, Swiss, or U.S. laws, as it solely facilitates the return of user-deposited assets in a structured manner. No additional financial incentives or staking rewards are being introduced in this proposal.
Context and motivation
veANGLE deprecation
The ANGLE locker was the first liquid locker of Stake DAO. It was deployed even before Curve and Frax. While it was successful in significantly reducing the circulating supply of Angle, the Angle Labs team found the veTKN model not flexible enough to support their rapid evolution and decided to progressively move away from this model, first by ceasing the yield to veANGLE, then by halting the inflation allocation votes, and finally by unlocking the veANGLE and dicontinuing on-chain governance.
In this context, the utility of veANGLE, and therefore sdANGLE, progressively decreased to nil, and the ANGLE locker is now a dead locker that imposes unnecessary costs for the DAO to maintain it while not providing any benefits to either its users or the DAO. It therefore makes sense to participate in the veANGLE unlocking and allow sdANGLE holders to redeem their sdANGLE for the corresponding amount of ANGLE.
Fee compensation
Since SDGP-38, all lockers are subject to a 15% fee on their native yield. When Angle stopped distributing protocol revenues to veANGLE, they said that there would be other sources of revenue for veANGLE (and therefore for Stake DAO), notably through airdrops, or exceptional revenues like the Euler hack profits (which in the end were never distributed), or more recently, their one-off USDA distribution.
However, when receiving those airdrops, instead of using their historic on-chain reward distribution contract, they chose to use their off-chain reward distribution tool called Merkl (which seems to be a big focus for the team nowadays and enables Angle Labs to charge a 0.5% fee on the distributed rewards). With this distribution mechanism it is impossible for Stake DAO to take the normal fee out of this yield. Therefore, Stake DAO couldn’t take any fee on all recent sdANGLE revenues, and most importantly, on the Pyth and Layer0 airdrops and the recent revenue distribution.
While there is a blur on whether airdrops should fall under the umbrella of revenues on which the DAO fees of SDGP-38 applies, there is no reason why the recent veANGLE revenue distribution would be exempted from fees. Given the ambiguity, Stake DAO engaged with the Angle team which agreed that the fee could be collected during the redemption phase, which is made possible by the fact that their buyback process sets a price for the ANGLE/USDA ratio. The total distribution to sdANGLE holders represented 478,268.7562 USDA. This represents 71,740.3134 USDA of missing fee (15%) for Stake DAO. Following Angle team’s suggestion, and acknowledging the price of Angle token set at $0.01563 per ANGLE token, this means the missing fee corresponds to 4,589,911 ANGLE tokens. As the locker has 59,681,397 ANGLE tokens in its lock, the unlock fee that would fix the situation is 7.6906901% (4,589,911 out of 59,681,397).
This ensures compliance with prior governance decisions, equitable fee collection, and transparent economic alignment between token holders and the DAO.
Bottom line, the idea of this fee is to give sdANGLE users the same outcome as if they add a 1:1 sdANGLE to ANGLE redemption and paid the normal performance fee on the locker.
Technical specifications and implementation
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We propose following the following steps:
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Unlocking the locker’s ANGLE:
- Governance approval will be sought via veSDT voting.
- Transactions will be executed to claim and unlock ANGLE from the locker.
- Fee Deduction & Redemption:
- Keeping 4,645,262 ANGLE for the DAO as a governance-approved fee on the recent $484k yield distribution to sdANGLE holders.
- Allowing sdANGLE holders to redeem each of their sdANGLE on a 1 sdANGLE = 0.9222 ANGLE tokens basis.
- The redemption period window will last for 12 months from the deployment of the redemption contract, after which any unclaimed ANGLE tokens will transfer to the DAO treasury.
- The locker will be halted and no new sdANGLE tokens will be minted.
B. Technical specifications:
- Passing transactions for the claiming of Angle.
- Developing a redemption smart contract.
- Any unforeseen issues in the redemption process will be reported immediately to governance for emergency amendments.
- The second part will require development resources (approximately 5 developer working days).
Voting options
- Yae: approve the unlocking of ANGLE tokens and the deprecation of ANGLE related products, and apply the proposed fee structure.
- Nae: request a rework of the proposal.
Admin: veSDT holders
Community feedback: 3 days minimum
Voting period: 7 days