"A Tease" - FraxCheck #41

This week... I call this week the “A Tease” week. As the name suggests, this week we were so close to something good but no dice.

May 30, 2023


  1. frxETH // ∆ +39% increase over the last 30 days
  2. FraxLend // $70M+ Borrowed
  3. Consolidated Profit // -$474k for May 2023

Frax Supply & Peg

This week things continue to be quiet in the $FRAX stablecoin realm. We have supply remaining flat, the peg range is tight, and the Curve swap exchange rate is at $0.9977. As we’ve said, we do not like to see a 7 number in that rate. Let’s get this rate back above 0.9980 bls.  Also, this rate has been decreasing for the past few weeks in a row.  Aside from that, not much to report here so let’s move on to the Collateralization and Decentralization Percent.

Collateralization & Decentralization Ratios

Again, very calm on this front as well. The Collateralization Percent remains at its all-time-high of 94.8%, been this way for the past 6 Frax Checks. The Decentralization Percent also remained flat this week at 21.5%. We’ve previously been on a downtrend for nearly 8 weeks now so we’re glad to see this slight reversal.


For Frax’s liquidity-as-a-service in the form FraxBP, we have 500M TVL which experienced a little bump +0.4% over last week. The volume is at 45.5M so far for May, which is only a 9.1% utilization rate, fairly low when compared to what happened in March with the USDC fiasco.  The LPers in the FraxBP and all the associated metapools are positioned to facilitate large swaps but we feel that idle capital could be put to use. If only Frax had something planned for this, oh wait, there is. It’s called BAMM — more info soon.

We are definitely in a new regime for Frax liquidity on Curve. This marks a significant milestone in the relationship between Frax and Curve as Frax pools are now the predominant stable coin pools on Curve.

IQ Staking

Did you know that BrainDAO was founded by Sam K before he founded Frax Finance? That’s right! BrainDAO’s flagship product is their IQ.wiki, which is the crypto encyclopedia. We have nearly all of our Flywheel guests wiki page on there so be sure to check that out!

Additionally, you can stake IQ today to earn a whopping 122%. There are 1745 holders of IQ on Ethereum but only 179 are staked. There’s definite value in staking as the treasury is $15.6M. There needs more governance power to secure and direct the treasury.

Be sure to go to the staking page today here.

FrxETH supply and distribution

Now onto the crowd favorite, le frxETH. We rocking strong here with 229,773 frxETH supply, an 6.9% increase from last week. This has been a good month for frxETH.  We were stalling a bit after Shapella but things are changing.

FrxETH peg

Reminder, frxETH is still a stablecoin, just a stablecoin pegged to ETH instead of the dollar. So we must check the peg. Here the dashboard shows 0.9998, a fairly strong rate, but we can’t just rely on dashboards. In the markets, we swapped 3.5k frxETH for ETH via Curve and received an exchange rate of 0.9989, which is also a very strong exchange rate. Arguably, one of the best rates in the LSD landscape.

Competitive landscape

Speaking of landscape, let’s look at the LSD market. Unlike last week, we are up small in market share this week. We’ve risen 2% to a 2.47% of the total ETH LSD market. We saw strong growth over the last 30 days of 39% and our 7-day change is at 7%. Though, we’re not alone. Rocketpool also had a great month so they’re climbing strong. Lido was previously shedding some market share but this month they’re clawing it back, up 10% for their 30-day change. The bad news continues as frxETH is in the middle of the pack this week in the yield arena. Here we witnessed one of the lower APYs at 4.87% — but still it’s that sweet native ETH yield.


The FPI has remained quiet for some time now since the release of veFPIS. We saw the a flat week this week so the supply remained at 82.6M but note that FPI is actually above the required peg by 37 basis points. The Treasury TVL is grew by $200k this week to $89.2M. We like to see the Treasury TVL increasing as well as the equity value increasing. The equity value is at $4.5M.


One of the pillars of the DeFi Trinity is lending leg so here we have FraxLend. The TVL is at $260M but the borrowed amount is at $70M+.  This is an all-time high in borrowed amount.  The utilization rate is back to 71%, which is a 16% increase from last week.  Let’s take a look at the FraxLend pairs. The sfrxETH/FRAX is still only putting out a 1.92% borrow rate with a staking yield of 4.8%. And of course, the ol’ reliable CRV/FRAX is putting out steady yields of 7%.


Lastly, we have the final leg of the DeFi Trinity with FraxSwap. We like to call this the Dex that no one talks or knows about but it’s pushing out major volume relative to its size. There are only 64.4M TVL across all the pools yet it facilitates $43.3M in volume which is a 67.0% utilization rate.  Though this has been one of the slower week since our usual FXS/FRAX pair normally facilitates $15M in volume but this week we only processed $3.7M.


Revenue, Expenses, Profit

Show me the money! Well, here it is. We know this month is going to be an expensive month for the Convex AMO since the bribe epoch payment fell on the 1st and 30th of this month. We’re seeing a loss of $870k in the Convex AMO. But do not fret as the other AMOs and revenue streams are stepping up. For FraxLend, we’re pulling in about $16k per week so we’re at $65k for May. Fortunately, everyone is behaving responsibly so we do not have further liquidations this month so we remain at $15.5k.

Following we have the frxETH revenue which we calculated by taking the quantity of frxETH multiplying it by 7% for the staking yield then multiplying again by 8% to get Frax’s fee share then a final multiplication with the price of ETH and finally dividing that by 12 to get the monthly figure, which is $195k — awesome. Lastly, we have the FPI which generated $118k in profit, that is after the requirement for the peg.

That is it for this week’s Frax Check #41!  We hope you guys enjoyed this one and see you next week to welcome in the month of June!


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.

More from Flywheel

View More

Subscribe and join the Flywheel family

Always Free. Never Spam.

Harness the power of the flywheel.

Not financial advice. Flywheel content is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions.

Flywheel and affiliates are not liable for any investment losses or damages resulting from your reliance on any information provided.

2023 ©️ Flywheelpod Inc. All rights reserved.