Stealth Mode - Cryptovestor’s Alpha Corner #4

Oct 10, 2023
Stealth Mode - Cryptovestor’s Alpha Corner #4

Frax has a habit of shipping code in the middle of the night when no one is paying attention. Such was the case with the Frax v3's launch. Sam K. leaked it out on anX Spaces and said that some v3 contracts "might or might not be deployed soon."

We waited and waited and it felt like nothing was going to happen.

At first I thought something went wrong but nope that wasn't the case. Just more stealth mode action from Frax. V3 docs were subsiquently dropped in the main Frax TG group.

At first glance of the docs, it didn't seem like much was said that we didn't already know about especially if you have been following me, but we did get some contract addresses for sFRAX and FXBs.

Asking Sam for more details, he confirmed that the core contracts were in-fact deployed and all we were waiting for is the front end GUI.

So where is the alpha?

Well, we know from the docs a few pieces of key info..

BAMM, Fraxlend and Fraxswap

BAMM, Fraxlend and Fraxswap are going to play a major role if the new peg stability mechanism. Its still not clear exactly how yet but I have some basic info to share. I've been trying to extract BAMM alpha from Sam for quite some time, and finally he broke his silence. BAMM will somehow be used to maintain Frax's peg regardless of USDC's peg. Take a look at what Sam had to say.

Frax is NOT redeemable for $1.00

At first CT went nuts after reading this section of the v3 docs. But after probing Sam a bit, it became clear this was part of Frax's strategy to avoid some regulatory issues. Its actually a genius move. Frax decided to exclude any on-chain mechanism to redeem Frax for USDC or $1.00. They decided to make the redeem function a curve swap. At first this sounds ridiculous. Why not add this in? Clearly this cant be difficult to code? Well lets break it down...

  1. All you can ever get from an FXB is Frax.
  2. If you want US dollars you can go to Curve and swap it for USDC or USDP which are redeemable for $1.00.
  3. A Curve swap is a net positive to the curve ecosystem. Adding to swap fees so veCRV and cvxCRV holders benefit including Frax.
  4. No govenment official can ever say 1 Frax is redeemable for $1.00 USD because Frax does not offer that option. A user must execute a swap from Frax to USDC or USDP on Curve. It just so happens that 1 Frax will get you 1 USDC or USDP but its not coming from Frax the protocol. Get it...

Here is funny exchange I had with Sam that says it all

Paypal still in the game?

I thinks so, Listening to a Flywheel podcast this week where Sam was interviewed about v3, he casually included PYUSD as a possible stablecoin that can be used to go back and forth between FXBs and US Treasuries. Listen to this clip and you decide.

Paxos announcement?

Not much to mention here because we all know Paxos is doing a deal with Frax, but how big is the deal? We don't know yet, but we will soon I think, take a look. Announcement is imminent!


Sam leaked a ton of alpha about Fraxchain on his recent interview. Apparently the Frax team has been working on the sequencer code to create a type of market for block space. In the end Fraxchain users and developers get rewarded for using the chain.

This is a totaly new concept and has not been done before at the sequencer level.

In addition it appears that the Fraxchain contracts have been deployed on a internal testnet. Looks like we might actually get this sooner than we think. Listen to the clip below and take a look at this screenshots below.

So we know the v3 GUI will be out soon, sFRAX and FXBs will be some of the first products deployments of v3 that we will see launched. FXB curve pools probably on the way soon as well. Remember Frax v3 will be a rollout that will take a few weeks, this is not something that we see launched in one day.

Until next time degens!

Follow me @Cryptovestor77 on X for 24/7 Alpha on the Curve and Frax Ecosystems.

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.