"Bls, make it stop" - FraxCheck #15

This week is the “Bls, make it stop. Bls”-week.

Nov 22, 2022

Welcome to Frax Check.  Your weekly frax vibe check.  I am your host Kapital K.  As always, I'm joined by our producer extraordinaire Sam, Dave is traveling today so Sam will take on the gov check for us.  We will be going straight to the source of truth via checking the chain.  Before we jump in, please subscribe to the flywheelpod and follow us @flywheelpod on twitter and tg.

This week..  I call this week the “Bls make it stop, bls” week.  Moment of silence.

Let's begin our regular programming with the Peg.  We saw it get as low as $0.998 with a high of $1.000 for the week.  Peg Check = Strong.   We then looked at Curve via swapping 100M FRAX for USDC.  We received a 0.9884 exchange rate, which is a decrease of nearly 30 bps compared to last week’s.  The Frax team has yet to balance the pool so there’s an imabl of like 75/25 Frax/USDC in the pool right now.  Be careful of slippage guys.  Moving on we have our Collateralization %.

This is the % that conveys how much FXS (algorithmic) is used as collateral.  I want to highlight the collateral ratio for the OUTSTANDING FRAX aka non-Frax controlled.  A reminder, Frax protocol owns a lot of its own FRAX and theoretically, Frax won’t ever redeem its own underlying collateral backing so the only real collateral ratio we should monitor is that of the OUTSTANDING FRAX, which currently sits at 87.5%.  Following we have the Decent %.  We are slightly off the lows with a 13.1%, which is an 1.8% increase from last week’s Frax Check.  V v v v much bear market vibes across the board when it comes to these two metrics.  We want to see the Collat % going back to the low 80s and the Decent % going back to 30s.

Okay.  Quick summary Health Check.  Peg Good.  Curve Swap mmmmm.  Collat % could be better.  Decent % lil bounce from ATL.

Next, we have our new segment of the check where we look at FrxETH.  As always, we check the peg.  Peg check here is strong you see the price delta is only 0.0001 between frxETH and ETH.  We obvs have to go into the market and check this ourselves and you see here that I tried to do a 8905 ETH swap which is about $10M and I get an exchange rate of 0.9861.  That’s kinda ish good.  Also, last week we had 38% of the frxETH staked in the Curve pool, and now we have 65% of the supply inside curve.  The APY as per Convex is at 10% projected.  Littttt.  That’s why everyone is here.  Let’s see what the count looks like this week.

The count is at 17,038.  And look at that chart, I know you can’t read it but just appreciate the verticalness off that graph.  +185%.  Hot.  On the staked side we see that 34% of all the frxETH is being staked to earn the ETH native staking rewards, which is 5-7% but since only a third of frxETH is staked we can multiply that 5-7% by 3x.  Let’s do a quick summary check.

Peg check strong.  Curve swap strong.  Count up only.  Staked healthy.

Let's jump into the AMO Holdings.  We have a grand total of $502.7M across all the AMOs.  This was a increase of 18.5% compared to last week.  PAIN.  The Curve AMO increased by nearly $85M.  These are wicked AMO moves.

Onto the profitability of the Curve AMO.  We’re now at $1.151M in Revenue for the month of November.  We paid roughly $1.28M in bribes so far plus about $430k in expenses, our loss is at $200k right now.  There’s some oddities going on cuz the Nov 14th bribe expense isn’t pulling in properly so I need to do a check at month end for proper accounting but I expect this to be our first down month.  RIP November.

Quick summary money check.  AMO holdings was $502M, +18.5% WoW.  Profitability, we’re down $200k, though I expect us to be at a loss for this month in November.  So lets see how November fairs.

Here's my favorite section of the Frax Check.  The Liquidity Check.  Do you guys remember the theme of this week, it was BLS MAKE IT STOP.  We’re at 65% of the 3POOL.  Insert meme “it’s ded already”.  The FraxBasedPool is $449.5M versus 3pool's $688M.  The basedpool saw a decrease of -3.7% in TVL.  But what’s more troubling is that there’s an imbalance in the FraxBP pool right now of nearly a 25/75 split between USDC/FRAX that needs to be rectified.  So expect the FraxBP to decrease even more but note here that the Frax3CRV pool is about equal to the FraxBP.  This is the first time it’s getting this close since it passed the Frax3CRV.  We need to monitor the situation.  Moving on, let’s chat about our metapools.

Reminder the metapool are pools that are PAIRED with the BasedPool, examples like LUSD/FraxBP.  We pretty much retraced all of our momentum for the last 12 weeks.  We’re currently at $43.9M, which is a 35% decrease WoW.  Any projects out there looking to work with the Metapool, please join the Flywheel pod TG chat and DM any of the hosts for assistance.

Also one quick note, we also have an additional $11.3M of TVL from non-stable pairs in the Metapools.  These are pairs like cvxfxs/FraxBP and cvxcrv/FraxBP.  Surprisingly, the non-stable pairs TVL didn’t go down much at all (10% ish) when compared to the stable pairs.  What is going on?!?!  So adding all of the stables and non-stables TVL, we have a total of $55M of liquidity paired against FraxBP, 31% decrease, down horrendous.  Please resume uponly next week please!

Summary time.  Liquidity Check.  FraxBP is 449.5M which is 65% of 3Pool.  The MetaPool is at $43.9M for stable pairs, marking a 35% decrease over last week.  And TVL of All pairs (stables + non-stables) are at $55.2M.

Lastly, the main reason why we track all of this is to make sure the FRAX supply could grow as big as possible. This week we're at 1.178B, which is a -0.1% move, pretty much unchanged.  We need to keep our eyes on the prize and grow this number.  But expect this number to go down a bit from us rebalancing the Curve AMO and the FraxBP.



Follow Flywheelpod Twitter: https://twitter.com/flywheelpod

Telegram: https://t.me/flywheelpod


Listen to Flywheelpod Wherever You Listen to Podcasts:


Apple Podcasts:


Connect with DeFi Dave Twitter: https://twitter.com/DeFiDave22


Connect with Kiet Twitter: https://twitter.com/0xkapital_k


Connect with Producer Sam Twitter: https://twitter.com/traders_insight

Telegram: https://t.me/ssmccul


Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video 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.