Frax in Review - Feb 6th, 2023

BAMM leak, sFrxETH proposal on Aave v3, Convex single-sided staking and more.

Feb 6

We see you Frax Bull

Sam K new interview with The Empire

For another week we’re leading the FiR with another BIG interview with Sam K. The Empire dropped the episode this morning right as we were writing. This is an interview you should share around, Sam K lays out the mission and goals for Frax very clearly. For anyone not into Frax, or is trying to learn about Frax, this should be one of the first places they start.

Lets go over some of the big highlights:

• Stablecoin Maxis -The reason Frax is a stablecoin maxi, is that at end of the day, the most useful and profitable part is the ability to generate a liability that people can use as a currency. This is all just modern day banking activity for the crypto generation. The goal for Frax is to build all of the risk free assets in crypto, so that regular investors will want to hold spot.

• Borrow AMM (BAMM) - A brand new product that will be released sometime in 2023 :0 Sam K announced BAMM where “you can borrow “stuff ‘ and have spot liquidity without external oracles. The idea is to capture the long tail of the market. Sam K said that the goal should be that BAMM should not be risky for the protocol.

• The multi-sig is getting fully decentralized in q2. It will be governed by veFXS holders.

Marc Zeller proposed adding sFrxETH to Aave V3

Based on the current setup of FrxETH at this moment, Marc recommended:

“While we suggest the community to wait for the feedback from risks teams Gauntlet (@Pauljlei) & @ChaosLabs, the ACI suggests the following risk parameters to start the conversation. These parameters define a non-borrowable asset with a 60% LTV.”

Additionally, he recommended a supply cap, also that it not be considered fit for emode. This final part is important as emode provides safer leverage for LSDs. FrxETH should be less competitive as a result in Aave. Once the team decentralizes the validator option, emode will be added.

Convex FXS single-sided staking

Last week we talked about how C2tP is aware of the peg issues between cvxFXS and FXS. Since then a vote has been put up on Convex governance to do two things:

• Move the 10% Convex Frax protocol fee from the cvxFXS-FXS curve liquidity pool to a single sided staking cvxFXS contract.

• Move the veFXS fees from the cvxFXS-FXS curve liquidity pool to single sided cvxFXS staking contract.

Up until now, all rewards have been sold back into the LP pool. This, along with additional sell pressures, have driven the spread wide. Creation of a single staking option for cvxFXS will lessen sell pressure and allow for more interesting positions to be created.

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Bunni takes over FraxBP as most traded LP

Timeless Finance @Timeless_Fi

🔥Bunni has taken over @fraxfinance liquidity🔥 Since Bunni launched $oLIT incentives last Monday, the Bunni FRAX-USDC pool has processed over $25.75m of $FRAX trading volume. This makes Bunni THE largest liquidity source for swapping between $FRAX and other stablecoins.

Other things

Best of Frax Telegram chat

veFPIS = soon

Bridges are just stablecoins

Can we say Fraxchain?

Tweets

Sn/Fr-axgener 200x @napgener

$FXS looks GREAT. 🚀🔥 200X

Napgener deserves some respect... Look what he was posting last year

Sn/Fr-axgener 200x @napgener

1) A thread about liquid staking derivatives and why $FXS is the best buy in all of crypto right now: 50% APR for staked $ETH at 6k locked eth. 24% apr when it doubles to 12k locked. 12% when it doubles again to 24k locked. staked eth TVL can 4x and still beat $stETH yield

Delphi Digital @Delphi_Digital

1/ @fraxfinance has an ultimate vision to be "The Holy Trinity of DeFi": 🔹An exchange 🔹A lending market 🔹A protocol controlled stablecoin Frax Finance: A simple breakdown ⬇️🧵 members.delphidigital.io/reports/protoc…

members.delphidigital.ioDelphi DigitalDelphi Digital Members Portal

Treehouse 🌳 @TreehouseFi

New Year’s feels like it was just yesterday. It’s hard to believe Jan has come and gone! January seemed like a replay of the altcoin season as small-cap coins outperformed benchmarks. Written with @fraxfinance maxi @matrixthesun, our Jan recap of the hottest narratives 👇

tokenbrice.eth (🥚,🐔) @TokenBrice

frxETH is taking off, but still <1.2% total LSD Although Frax's CRV/CVX stash is massive, it's not infinite. There will be a point where Frax can no longer scale the frxETH/ETH pool rewards with its voting power What then? Any 🧠 done the maths of the wen (frxETH cap) of that?

Token Unlocks @Token_Unlocks

The mega-thread of LSD insight 💡 After the tweet of LSD fundamental, here's the list of tokens that this analysis thread will cover 🧵; - $LDO from @LidoFinance - $RPL from @Rocket_Pool - $SWISE from @stakewise_io - $ANKR from @ankr - $FXS from @fraxfinance 1/29

hildobby @hildobby_

Despite only being a few weeks old, @fraxfinance is seeing some impressive staking numbers with 5.4% of amount staked this past month 🔥 Frax is now behind 0.5% of ETH deposited to the beacon chain, placing it in 13th place Source: dune.hildobby.xyz/ETH-Staking

Jack Corddry (¤,¤) @jackcorddry

@wavey0x @bantg @fraxfinance A major misconception about frxETH is that Frax is paying for the bribes & increased yield out of pocket, so it is unsustainable. In reality this withheld ETH LPs curve like an AMO & the rewards are fed into Votium, so there’s 0 external cost. That’s the whole “flywheel” mechanic

wavey0x.eth @wavey0x

Spent some time yesterday considering @fraxfinance's frxETH system and wanted to share an analysis to answer the murky question of: "is my frxETH backed 1:1 with ETH?" while also following-up my previous tweet which regrettably sounded like a "gotchya"...

J◎n Galt☀️ @JonGalt14

This round on Votium, we're seeing 47 boxes, up from 40 the last couple of weeks. That represents 37 unique pools, up from 31 and 32 in the prior two sessions. And 27 of the 37 are Frax related, up from 23 last time.

Sam Kazemian (¤, ¤) @samkazemian

“bUt FrAx iZ juSt aN UnSusTaInAbLe iNcenTiVeS iNflATionArY pOnZi” Nope, you just don’t get it anon. Thanks @Delphi_Digital for the great data 🙏 this should lay it to rest:

Delphi Digital @Delphi_Digital

.@fraxfinance has earned $21.8M in net revenue from farming and bribing. https://t.co/BRYaGdGLJd

DeFi Dave (Arc Arc) (¤,¤) @DeFiDave22

Anon explains how @fraxfinance AMOs work. TLDR: Liabilities to the protocol (whether they be FrxETH or FRAX) are burned instead of redeemed.

McKenna @Crypto_McKenna

The Frax team are geniuses. I don't own enough.

pibblez🟪 @0xpibblez

.@fraxfinance currently voting on a frxETH liquidity program to cement its position as an alternative to WETH 👀 https://t.co/ZuoLxceIBf https://t.co/x7QzsQc4yn

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Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This newsletter is not tax advice. Talk to your accountant. Do your own research.

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