The ppp is standard linux daemon that supports both pap and chap and more. I can clearly see in my logs that pap is used for my pppoe connectivity and chap is used for l2tp vpn in. I have no reason to believe that chap would not work for pppoe or at minimal that it would not work with little tweak of config files. But chap and pap are definitely compiled in. On EdgeOS check /etc/ppp/ directory for all the config files.
On related topic, you may want to consider ER-X instead of ER-L, some discussion HERE why.
