Frax Finance Monthly Report #35 | January 2024.
A round-up of Frax Finance updates in a few minutes.
Project Updates:
1)[Liquidity Staking Token]: sfrxETH was added on Eigenlayer. SfrxETH holders can re-stake their token through the Eigenlayer UI between Jan 29th — Feb 2nd.
2)[Fraxtal]: The Fraxtal (Fraxchain) testnet went live and has been running smoothly, the mainnet is expected to launch by the end of the month.
3)[frxETH v2]: Flywheel released a detailed thread on how frxETH v2 stands to benefit from Ethereum’s modular transformation. The Modular solutions such as Celestia and Eigenlayer will need core services like frxETH v2 to scale crypto. You can read the full details here.
4)[Governance Proposal]: A proposal to bring Centrifuge Prime to Frax Finance went live and passed. Centrifuge aimed to introduce both a new, high-quality counterparty to the Frax RWA ecosystem (the Anemoy Liquid Treasury Fund) as well as foundational infrastructure that Frax Finance can use to source the assets and managers that the protocol and community desire. Read the proposal here.
5)[Borrowed AMM]: A detailed thread which explained how Borrowed AMM (BAMM) is innovating in DeFi by merging lending tech with AMMs and creating a new financial primitive was written by Stably. You can read the full thread here.
6)[Collaboration]: Frax Finance collaborated with Axelar Network to support the issuance of Frax-assets on Osmosis, Mantle, Linea, Kujira, Manta Network, and Scroll.
7)[Frax Finance Anniversary]: Sam Kazemian, co-founder Frax Finance was hosted by Defi Dave on Flywheel Twitter Space to celebrate Frax Finance 3rd year anniversary. Sam talked about the Frax progress in the previous years and looked forward to the year ahead. Listen to the full discussion here.
8)[Collaboration]: Velocimeter collaborated with Frax Finance to bring deep liquidity to help facilitate swaps into Frax Finance assets on Mantle powered by Squid Router on Axelar Network. Users will be able bridge sFRAX & sfrxETH from Ethereum on Velocimeter until liquidity deepens enough to facilitate swaps from hundreds of assets & dozens of supported chains.
9)[Collateral]: A vote to move $20M of stablecoin collateral into treasury bills was passed. Frax Finance will be deploying $20M worth of assets through Centrifuge Prime, a product which offers off-the-shelf solutions for DAOs looking to diversify the war chests. Prime provides the technical, legal, and financial infrastructure for DAOs to invest in RWAs.
10)[Halving]: $FXS underwent its annual halving, thereby reducing its daily emissions across all gauges.
11)[Collaboration]: Frax Finance and Wombat exchange Collaborated to launch sFRAX on Wombat. Frax strategically allocated its STIP Funds from Arbitrum Foundation, and wombat liquidity providers will be rewarded with the $ARB incentives.
12)[Collaboration]: Frax Finance collaborated with Balancer to launch sFRAX, a Yield-Bearing stable pool on Arbitrum. Balancer’s unique Yield-Bearing stableswap technology will help to ensure the LP efficiently accounts for the internal sFRAX yield and mitigates LVR.
13)[Arbitrum STIP]: Flywheel team wrote a comprehensive round-up of Frax’s Arbitrum STIP Yields into a spreadsheet that everyone can use for their own analysis/strategy building. Read the full round-up and the full yield spreadsheet here.
14)[sFRAX]: $ARB rewards went live for the $sFRAX on Beefy Finance. Users can bridge their sFRAX through FraxFerry to Arbitrum Network and enjoy extra $ARB for 14 days on top of your already auto compounding position.
About Frax Finance
The stablecoin (FRAX) is named after the “fractional-algorithmic” stability mechanism. The ratio of collateralized and algorithmic depends on the market’s pricing of the FRAX stablecoin. If FRAX is trading at above $1, the protocol decreases the collateral ratio. If FRAX is trading at under $1, the protocol increases the collateral ratio.
FRAX: is the stablecoin targeting a tight band around $1/coin.
Frax Shares (FXS): is the governance token which accrues fees, seigniorage revenue, and excess collateral value.
Frax Price Index (FPI): is the second stablecoin of the Frax Finance ecosystem. FPI is the first stablecoin pegged to a basket of real-world consumer items as defined by the US CPI-U average.
Frax Price Index Share (FPIS): is the governance token of FPI, which is also entitled to seigniorage from the protocol.
Frax Ether (frxETH): is a stablecoin loosely pegged to ETH, leveraging Frax’s winning playbook on stablecoins and onboarding ETH into the Frax ecosystem.
Staked Frax Ether (sfrxETH): is the version of frxETH which accrues staking yield, All profit generated from Frax Ether validators is distributed to sfrxETH holders. By exchanging frxETH for sfrxETH, one becomes eligible for staking yield, which is redeemed upon converting sfrxETH back to frxETH.
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