[EURS] - Stasis Euro stablecoin

[EURS] - Stasis Euro stablecoin MIP6 collateral application

This is a MIP6 Proposal for the addition of Stasis’ tokenized euro to MCD.

EURS is a standard erc20 token with approximately $35 million market cap.

1. Who is the interested party for this collateral application?

@befitsandpiper, A member of the makerdao community.

2. Provide a brief high-level overview of the project, with a focus on the applying collateral token.

EURS mirrors the value of the euro on the blockchain, and is supported by liquidity assurance mechanisms provided by ecosystem partners. Each token is backed 1:1 by euros held in reserve accounts. In addition to euros, EURS can be issued in exchange for securities, which are purchased by STASIS’ liquidity providers.

3. Provide a brief history of the project.
Closest thing I could find for this question, since I am not a member of the stasis team:

“In physics STASIS, pronounced stey-sis, refers to the balancing of various forces in order to reach equilibrium or keep something in one place. Our tokenization services account for all the forces that affect a digital asset, from technology to corporate structure, and from government relations to public relations. To do this, we’ve pulled together an ecosystem of licensed financial intermediaries, top law firms, and a top global accounting firm. Each party contributes to the ecosystem based on their own particular expertise, allowing us to create a comprehensive framework for tokenization while ensuring that a digital asset mirrors its off-chain counterpart in the long run. Despite shifting regulatory and economic environments, the assets we tokenize stay the same; they’re in stasis.”

4. Link the whitepaper, documentation portals, and source code for the system(s) that interact with the proposed collateral, and all relevant Ethereum addresses. If the system is complex, schematic(s) are especially appreciated.

the closest thing is this transparency page: https://stasis.net/transparency/

5. Link any available audits of the project. Both procedural and smart contract focused audits.

smart contract audit: https://blog.coinfabrik.com/stasis-token-smart-contract-audit/

6. Link to any active communities relating to your project.

community page: https://eurs.stasis.net/community/

There’s also a blog: https://stasis.net/blog/

7. How is the applying collateral type currently used?

collateral is used as a stablecoin representation of the euro. The liquidity/asset reserve process is shown in the schematic here: https://eurs.stasis.net/

8. Does one organization bear legal responsibility for the collateral? What jurisdiction does that organization reside in?

Yes, Stasis (STSS Limited) is a Malta based company.

9. Where does exchange for the asset occur?

Hit-BTC is probably the largest exchange where EURS is traded, but there a number of centralized and decentralized exchanges: https://eurs.stasis.net/community/

The rest of these questions will have to wait for a Stasis representative:

  1. (Optional) Has your project obtained any legal opinions or memoranda regarding the regulatory standing of the token or an explanation of the same from the perspective of any jurisdiction? If so, those materials should be provided for community review.
  2. (Optional) Describe whether there are any regulatory registrations for the token and provide related documentation (including an explanation of any past or existing interactions with any regulatory authorities, regardless of jurisdiction), if applicable.
  3. (Optional) List any possible oracle data sources for the proposed Collateral type.
  4. (Optional) List any parties interested in taking part in liquidations for the proposed Collateral type.
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Just for discoverability, the stasis guys did a previous application before we launched MIPs. It can be found here: [EURS] - Adding crypto Euro to MCD

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I haven’t found details on the business model. Interest rate at scale on the EUR is negative so providing a costless euro peg backed by fiat reserves is a losing proposition.

They will have to either lose money or take risks (by e.g. invest the reserves in corporate bonds) to keep the peg.

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As far as I can tell, they hold securities like equities and bonds and eurs is issued in exchange for these securities. Since the token is not under EU jurisidiction, there’s no way to charge negative interest against it. The peg is kept because eurs is always exchangeable for at least 1 euro of collateral.

It’s essentially a custodial version of the makerdao model, but using traditional assets instead of crypto assets

If they hold euro as collateral, someone in the banking accounting system is either :

  • Storing them at the ECB with a negative yield
  • Using secured assets like 3 months government bonds, all having negative yield.
  • Storing paper cash in a (real) vault, which cost money
  • Taking risks without any buffer nor any guarantee (MakerDAO liquidate at 150% for a reason).

There is no way to escape negative interest rate at scale.

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There is. We store with licensed custodians who pay interest because they use it in collaterized margin trading. We have the capacity to shield up to 1bn currently and even make some yield.

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Also EURS is the cheapest on and off ramp in the world. You can call it Euro-as-a-Service as anybody can jumpstart selling products and services by setting up EURS stablecoin settlement.

The APIs are open and free to use: https://stasis.net/sellback/api/v2/docs/swagger/#/
Live integration: acquiring.gozo.pro
Mobile apps: stasis.net/wallet
Cost is 1.5% for eu visa/mastercard, 3.5% for other cards
0% for sepa.

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Any stablecoin has just 4 available markets at this stage of blockchain evolution: acquiring, remittances, defi landing and corporate settlement. We are live in the first, experimenting with the second, fund raising for the third and have couple whitelabel projects in the forth.

You are right to an extend that stablecoins are more products than businesses themselves but business can be built around it.

Also, since the DAI stepped into the collaterized asset backing, EURS is the best quality asset on the market. And there should be competition vs USD because its era is ending.

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This is good to know. Is there any info you can share about the overall composition, duration, and credit risk of the EURS portfolio? There’s obviously a wide spectrum of risk levels for margin loans depending on the specific counterparty and collateral, this is basically Maker’s bread and butter.

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“I vote for EURS - a perfect tool for quicker entry and exit to and from volatile crypto-assets.”

“We need EURS - since is the largest Euro stablecoin, and I count my wealth in Euros.”

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There have been a number of posts from new forum members that have been caught in the review queue for this thread. I approved the first because one post could have been a fluke, and I’m leaving it up as it gives a good idea of what the others look like.

I’m not approving any more, as they are similar one or two sentence posts that are being (in my view correctly) labelled as spam.

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Live AMA with STASIS CEO GREGORY KLUMOV

Wednesday, July 29th

5pm CET TIME

Don’t miss out on a chance to know more about EURS! Take part in a live AMA with STASIS CEO Gregory Klumov!

Join AMA here on Wednesday, July 29th, 5pm CET Time.

Learn more about Mr.Klumov, watch this video!

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There is no duration risk currently. Just a fixed agreement with licensed custodian who re-sells that inventory to margin-finance investment programs government bonds. We have a policy not to represent more than 5% of assets per custodian and since we have three of them on the books current capacity is north of 1 billion euro in custody to shield from negative interest rates with much less risk than any commercial bank and even make some money on it to pay for the lights, audits etc.

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If I get this correct, you get a positive yield from someone using leverage for buying negate yield government bonds. This position has a carry cost and make sense only as long as government bonds appreciates. That’s pure speculation. I don’t like it but assuming a correct leverage (<5x) and average country rating (>= A) that’s not too risky (but obviously parameters matters).

Under such conditions, I can’t see why money market funds (MMF), or other players, are not taking the opportunity (pushing rates in the negative territory). Liquidity with no duration risk and low credit risk can’t be above 0 for long. Is such opportunity only temporary? Which is a risk.

It’s not that I don’t like EURS, I really like it. But as a good chunk of the MakerDAO community already finds USDC risky (hence the 4% risk premium), EURS has the same issue plus currency risk and credit risk. Does it makes sense to provide such a collateral with a +6-10% risk premium (regarding the EUR/USD evolution over the last month, it seems so :slight_smile: )?

I would love to be confident enough to vote for 4% risk premium. I don’t want to have a EUR stablecoin at disadvantage with a USD one.

PS : Great experience using the EUR on ramp. Really fast and cheap.

PPS : @LongForWisdom the spam is probably due to Stasis marketing team “bribing” for greenlight votes and messages in this thread. A bit unfortunate.

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Thank you for your comments, exciting to have a conversation with knowledgeable person.

So there is a market for residence via investments across Europe. It is quite big. All those residence programs usually require applicants to purchase government bonds and hold them for considerable time (5y+). Our custodians are providing leverage to those applicants to purchase bonds as this is very safe and committed customer who will not be closing the position to risk his residency. We, in turn, aim for big money market fund to run ourselves (but it’s only possible with significant reserves 100MM++, you are correct) and meanwhile we are tracking ~32mm, made “ISDA-like” agreements with licensed institutions to have a fixed yield for the capital we deploy to them. Keeping in mind our 5% rule.

Regarding USDC. There are more than 500 million people who use EUR. I think the market for DAI should include EU customers who have EUR as a natural balance sheet currency, EUR accounts and cards. We offer the best user experience and the cheapest on and off ramps out/to of EUR, including unbeatable 1.5% visa/mastercard fee, which is almost 3x cheaper what coinbase charges. Also, our light-KYC user experience is the richest on the market, allowing to transact up to 1000 eur without submitting identity documents. This euro-as-a-service via APIs allows anybody to transact instantly in EUR and accept payments with visa/mastercard, outsourcing the headache of huge transaction fees and negative interest rates to us. The risk premium on EURS will definitely be lower than on USD. If a EURS deposit market existed, millions of euros would be happy with 2-3% annual yield.

Hope it helps.

PS thank you for the off and on ramp feedback. glad you liked it.

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Thanks for the heads up on the marketing thing. For the record, Stasis folks, I’d really rather you didn’t try to bribe people to vote in your favour.

I apologize. Our PR person decided to go the wrong way with his resource.

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Hello, MakerDao community!

We sincerely apologize for this inconvenient situation. Our team has decided to launch Live AMA with Gregory in a few days: we see it as one of the most transparent ways to engage the audience, introduce our project to new people, answer the community’s questions, and dispel any doubts regarding STASIS/EURS.

We want to encourage users to learn more about our project and reward them for asking sophisticated, unusual, and tricky questions during the AMA. Best ones will be rewarded with bonuses in the form of EURS.

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Would love to discuss the future of USD at today’s AMA.

Join us: https://us02web.zoom.us/j/4428883881

8am PST
11am EST
4pm UK
5pm CET
11pm HK

Thank you for everybody who participated and your questions! My team will publish the recording shortly

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