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"Young Web3 talent of the year": Pablo Veyrat (Angle)

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Friday, February 24, 2023

The Big Whale has just organised its first "Web3 Awards" to honour the personalities and projects that are making the European sector shine. There were 7 categories. The co-founder of the Angle protocol, Pablo Veyrat, won the "Web3 Young Talent of the Year" award.

"It's the new wave of DeFi", "The project that was missing in Europe"... There's no shortage of superlatives about Angle, the decentralised stablecoin protocol dreamt up a few years ago by a certain... Pablo Veyrat, who graduated from the Ecole Polytechnique in 2020 and went on to study at the prestigious American university of Stanford.

"The Best Young Talent award is great recognition for what we're doing, and I hope it will give more exposure to a project that's still in its infancy," says the 26-year-old entrepreneur. "We're still very hungry and have a lot of things to show."

As opposed to centralised stablecoins, decentralised ones like the one issued by Angle, the agEUR, have several advantages. Firstly, they are less susceptible to censorship since no centralised entity controls them. Secondly, their underlying assets can be quite diverse. "They can be created from a wider variety of assets, which means you can develop a lot more applications around them and, in particular, returns," says the entrepreneur on whom the well-known US venture capital fund Andreessen Horowitz has staked.

A project based on the euro

The way it works is inevitably reminiscent of MakerDAO, one of the biggest decentralised finance projects and issuer of the DAI dollar stablecoin. "We're quite similar to Maker," says Pablo Veyrat, "except that we're focused on the euro and think we've found the solution to make its mechanism more efficient".

On Maker, each DAI created is backed by a 150% crypto equivalent guarantee. This is necessary to ensure that stablecoin retains its indexation against the dollar in the event of price volatility. Problem: it's inefficient in terms of the capital raised.

Angle's idea is to allow anyone to create an agEUR by placing only the equivalent in collateral. To absorb volatility, a market place internal to the protocol (the Core Module) issues futures contracts where traders position themselves with leverage. "This enables Angle to constantly maintain a reserve value equivalent to that of the agEUR in circulation", explains Pablo Veyrat.

For the time being, it is mainly dollar stablecoins that make up Angle's reserve (mainly USDC). Eventually, this could be used to acquire more traditional assets - such as sovereign bonds or ETFs - to provide returns for agEUR holders.

Sufficient to replace Maker? No, obviously.

Maker manages more than $7 billion while Angle has "only" $55 million. Nevertheless, the protocol of French origin has some serious assets to pull its weight and shape the next generation of decentralised stablecoins.

"To improve adoption, we will have to offer better products than what is currently being built around the dollar," insists Pablo Veyrat. "I'm thinking in particular of savings and investment solutions, with rates 2-3% higher than the market, which could attract institutional players."

In time, corporate bonds could also be deposited in Angle in exchange for the creation of new agEUR. "We would then have a real concrete case of the use of DeFi, which currently boils down to a closed circle that serves little purpose", he continues.

The big question surrounding Angle remains the issue of regulation. "This type of project is still under the radar, but it's not impossible that the authorities will one day look into it," huffs a specialist lawyer.

From Pablo Veyrat's side, the strategy is to move forward with a clear face. "We want to create an infrastructure that meets the needs of traditional finance, we are focusing on protocol compliance."

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This analysis is not investment advice. It has been prepared without taking into account your personal situation, particularly your financial situation, risk profile, and investment objectives.

Before investing in any product, investors should fully understand the risks involved and consult their own legal, tax, financial, and accounting advisors.

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