Two new gauges passed Curve governance over the past week, EUROC and Stax Finance / TempleDAO. Let’s meet them.
EUROC
$EUROC, Circle’s newest product, is the latest entrant into the fast growing field of Euro-denominated stablecoins.
The $EUROC token is managed by Circle, the entity behind half of $USDC. Like $USDC, Circle promised to fully back $EUROC 1:1. Circle also provides monthly attestations online and to regulatory bodies. The coin is presently live on Ethereum, and they have declared plans to launch $EUROC on multiple chains.
$EUROC’s launch comes amidst particularly tough macro conditions for the Eurozone. Over the past few months, the value of the Euro has slid into near parity with the USD, despite generally having traded above for years.
The specific European macro climate is far outside the scope of this US-based Substack, but it’s not hard hard for you to conduct your own independent research and read about the headwinds facing Europe, referred to Arthur Hayes as the “doom loop.”
In particular, the concept of “negative interest rates,” in which banks charge holders of Euros a fee for the privilege, should theoretically make Eurocoins patently useful. Even if you don’t dang on DeFi, you can still keep your Eurocoins in cold storage and reduce the risk of having your savings account slowly pickpocketed.
For EUROC, how they handle negative interest is a bit confusing. Their website claims “Circle assumes the interest rate risk on Euro Coin reserves,” so the means of keeping it backed 100% is a bit opaque to us if they’re suffering some losses.
Among the great things about EUROC’s launch is another Stablecoin bull, albeit one that’s starting to identify as a bear.
Despite the seemingly obvious utility of a Euro-backed stablecoin, the overall market for eurocoins has been slow to take off relative to dollarcoins. On Ethereum we tally a market cap of $225MM to $525MM for Euro stablecoins, broken down as follows:
Note, the data on these coins is in dispute — we arrived at this from starting with DefiLlama’s numbers and adding in agEUR, which they are not tracking. However, we note that Etherscan data reports $EURT has a max supply 4x larger than DefiLlama reports.
Whatever the actual value, EURT remains the dominant stablecoin, but the overall market for Eurocoins is less than 1% of the market cap of dollarcoins. One might expect lots of room for this to grow. However, European politicians have recently grown extremely hostile against their own citizens, which may spook some people away from the on-chain sanctuary.
For those who do partake, the battle for Eurocoins on Curve is heating up.
Curve recently deployed its $EUROC pool, which is itself notable. Since Curve released the v2 pool factory half a year ago, the team had not directly deployed a pool themselves. The $EUROC pool is the first pool launched directly by Curve in this new era, and therefore listed via the lesser used cryptoregistry. The $EUROC pool is a v2 pool built against 3pool, allowing fungibility to $DAI, $USDC, and $USDT, just like the Euro Tether pool before it.
The $EUROC governance vote has passed quorum, meaning we may soon see some rewards start to incentivize the pool shortly. Note that the Curve $EUROC pool contract is not yet verified on Etherscan, but we did a spot check of the deployment data posted to Github and the bytecode matches the standard v2 token used in deployment.
$EUROC will join a variety of europools on Curve, most of which are clocking far better yield than the negative interest rates promised by banks.
For users who want to hedge between dollars and Euros, the $EUROC pool is not the only option. In addition to the popular aforementioned EURO Tether pool (recently earning 7.4% boosted rewards on Curve), the EURS/USDC pool has also been humming at 2.5% boosted rewards recently.
Users interested in avoiding loss due to exposure to the USD have other good pegged options. The 3EUR factory pool among EURS, EURT, and agEUR is printing north 10% rewards alone (plus $ANGLE rewards). The ibEUR/sEUR pool used for KP3R’s Fixed Forex lately returned north of 14% in $rKP3R rewards. Neutrino also offers a Eurocoin, for which the factory pool has recently provided higher base vAPYs and almost 4% boosted CRV in recent trading.
Note also that Celo of cEUR fame recently submitted a governance proposal for a cEUR/agEUR/EUROC 3pool of its own. The likely uncontroversial proposal means the European front of the Curve Wars may get more crowded!
Stax Finance / TempleDAO
Also passing governance over the past week is the Curve factory pool for redemption of Stax Finance’s xLP, a wrapper for the FRAX/TEMPLE Uni LP token.
Stax, not to be confused with Bitcoin Defi protocol Stacks ($STX), launched from TempleDAO and is becoming a key player in the hot Frax ecosystem. The core philosophy of TempleDAO is to provide revenue-sharing vaults for investors. Partly this is accomplished through farming on their $127MM treasury, of which the significant $FRAX portion is farmed for $CRV/$CVX via the Frax-3CRV pool and reinvesting these yields into the flywheel.
To date, Temple attracted over $50MM into its core vaults, with variable yield hitting as high as 12%.
In late May, TempleDAO launched STAX Finance, adding flexibility to the burgeoning Temple flywheel. The specific value add of STAX is described as follows:
Additionally, TempleDAO has been an active participant on the Frax wing of the Pitch Money vote market.
Sam Kazemian discussed TempleDAO’s role in the growing Frax ecosystem on the great MarketCapping (no relation) podcast:
We’re bool-ish on everybody building the bear market, so we are excited to see these new Curve pools join the fun. Make sure to do your own research of course!
Disclaimers! In addition to flywheel assets (ie Curve, Convex, Frax), author has a small stake of Stacks ($STX).