"Normalizing" - FraxCheck #31

This week... I call this week the “Normalizing” week. As the name suggests, this week things were quite surreal.

kapital_k
kapital_k
March 21, 2023

Welcome to Frax Check.  We will be going straight to the source of truth via checking the chain.  Before we jump in, please subscribe Flywheel DeFi, it really does help!

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This week... Kiet named it “Normalizing” week.  As the name suggests, things are falling back into place.

Frax Supply & Peg

Let’s start with the flagship product, the $FRAX stablecoin.  Supply has been holding steady at $1B-ish, unchanged from last week, even after everything that happened.  Next, checking the peg, it went as low as $0.996 with a high of $1.001 for the week – things are returning to normal.

Swapping 100M FRAX for USDC via Curve gives a 0.9991 exchange rate.

Collateralization & Decentralization Ratios

This is the percentage that conveys how much FXS and other digital assets (algorithmic) are used as collateral.  It is unchanged at 92%.  The Decentralization ratio increased 1.7% and is now at 23.5%.

FraxBP

The FraxBP Total Value Locked (TVL) increased to $493.6M, a +6% increase from last week. This was the first uptick in TVL in four weeks.

In February the Curve LP traded volume of 49.3m, and in the three weeks of March it hit 194m, an increase of 30m over the last week and a 39.3% utilization rate. Stablecoin trading volume has been ridiculously profitable for Curve this month.

FraxBP vs 3pool

This week the FraxBP increased its TVL to 118% of 3pool, a 1% increase from last week.  It looks like we’re sustaining this ratio!

The FraxBasedPool is $493m versus 3pool's $419m, gaining $30m over the last week. Now, it wasn’t easy to get to the top, but now we must stay at the top.

FrxETH supply and distribution

The frxETH supply is 121,079, an increase of +5.1%; not too shabby.  As frxETH supply matures, growth may slow down, but for now its still amazing.

Currently, 58% of the frxETH is earning a nice native staking yield. The Curve FrxETH/ETH has 31% of the supply.  The remaining 11% is floating in the ether somewhere. The yield parity between the sfrxETH and Curve pool is reflected in the current split.

FrxETH peg

The peg check is back to one of its best rates ever at 0.9997.  Swapping 3500, which is roughly the amount of the largest frxETH holder, gives a rate of 0.9980.  Not too bad considering we got as low as 0.995 last week.  Fortunately, the TVL is quite sticky at $124m, an increase of $10M from last week.

Competitive landscape

Frax has the highest 30-day delta of the group, at +23.4%.  FrxETH’s market share is at 1.55%.

Lido lost 0.3% market share this week.

Comparing yields, frxETH dominates with a 11% and the closest competitor is Lido with 5.6%. The rewards were higher this week due to massive MEV captured during the crazy market situation.

Frax Price Index (FPI)

The Frax Price Index (FPI) supply is 82.3m and is above the peg by 0.81%. FPI’s treasury is at $88.3M.

Fraxlend

Over the last week Fraxlend gained $30M of collateral, with 144m in TVL and $34m borrowed FRAX.  The utilization rate dropped by 3% down to 63% from just a week ago.

The highest supply APYs are the sfrxETH/FRAX at 8.9%, gOHM/FRAX at 8.5%, and CRV/FRAX with a juicy 6.5% APY.

Fraxswap

Data from DeFiLlama shows TVL is $69m with $128m monthly volume for March so far.  Taking the monthly volume divided by the TVL to get a utilization rate of 185% -- surprisingly this isn’t as high given the volume Curve experienced this last week

The last leg of the Stablecoin Maximalism: the DEX aka FraxSwap.  Per DeFi Llama, the TVL is $69M with 128M monthly volume for March so far. We just took the Monthly volume divided by the TVL to get a utilization rate of 185%.

AMOs

The grand total of all AMOs increased by 2.2% to 921m.  The Curve AMO increased by 19m to $625m, Liquidity $85m, increased $10m, Lending $86m gained $6m, and Investor $135m.

Revenue, Expenses, Profit

Onto the profitability of the Convex AMO.  For the month of March, Frax had $670k in revenue and $890k in bribe expenses, which means its at a loss of $220k for March.  Frax has a bribe payment coming up shortly so it will see higher losses for the month – with the market no longer in the echo bubble mode, this might be a red month for Frax.

Onto the profitability of the Convex AMO.  For the month of March, we have $1m in revenue and $1.6m in bribe expense, which means a loss of $550k for March.  Bribe payments were this week so that’s why the expense is quite high, but we have another week in March to make up for it.


ACCESS TO SLIDES: Here

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


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