FRAXTAL – L1, L2 or L3?? Frankenstein-Chain? - Cryptovestor's Alpha Corner #12

Jan 30, 2024
FRAXTAL – L1, L2 or L3?? Frankenstein-Chain? - Cryptovestor's Alpha Corner #12

All of CT has been buzzing about L1’s and L2’s lately, Blast was able to amass 1.2b in TVL in recent months. L1’s Like Solana and Celestia have 10x’ed in value in a few short weeks.  So, what has the team at Frax been working on so quietly over the past year? Guys I don’t even know how to describe Frax’s new L2 creation. I am at a loss for words here. The best way I can describe it is, it’s a Frankenstein-Chain, a creation so profound and innovative, that, dare I say, its development is up there with Ethereum itself. Vitalik would be proud of this!

Why Frankenstein-Chain? Well, it has bits and pieces of the best tech from several chains along with some innovative tech that the Frax team sprinkled in. At its heart is uses an OP stack so it will be automatically compatible with any Optimism based chain such as Coinbase’s (Base Chain) immediately at launch. It will have zk rollup tech mixed in as well, have its own data availability layer and use frxETH and Frax, the stablecoin, as its native gas tokens. It will have an incentivization structure to reward block space usage for both users and developers alike that will be issued in the form of locked FXS.

But last night Sam K. threw an alpha bomb at us in the TG chat in response to one of my questions. I don’t even think I have fully digested this yet. I will post it here for everyone to review it in detail.

Let’s unpack this further…

Fraxtal v1

1.        Modified OP Stack

2.        Super chain compatible

3.        Likely be cheaper and faster

Fraxtal v2

1.        Goal to become a “zk L1” chain

2.        That every type of chain can commit state to!

3.        Think Celestia thin L1 but for root hash states and DA pointers

This is all very new, and I am speculating here a bit, but I asked Sam what he meant by “every type of chain can commit state to” and I asked if it meant that a chain like Solana could communicate with Fraxtal? And he responded “Exactly!”

If this is the case, then Fraxtal will be the first ETH based L2 that can communicate natively with hundreds of other blockchains bringing a valuable connection to ETH’s expansive liquidity moat. It also likely means that Frax will be able to issue its stablecoin natively on other chains without bridges. Fraxtal could be the L2, that in a way, is the ultimate scaling solution for Ethereum. All while being secured by ETH!

And, since frxETH will be used as one of Fraxtal’s gas tokens, the more gas used on the chain the more ETH gets staked by Frax, securing the ETH network even further. At the same time, the more frxETH used on Fraxtal, the higher the APY will be on the sfrxETH vault! The more Fraxtal is used the more incentives are sent out to its users and developers in the form of veFXS, auto locking the Frax governance token, FXS. It’s as if Fraxtal is a giant Flywheel chain! Pun intended.  Let’s not forget, it’s likely that cvxFXS will be the liquid version of the claimable token as Fraxtal incentives are issued and locked. Causing and even deeper flywheel effect because that claimed cvxFXS gets FXS perpetually locked into Convex forever. The shrinking supply of FXS with put upward pressure on FXS’s price!

None of us have enough FXS!

P.S. One last piece of alpha, Sam confirmed the Fraxtal airdrop is coming, and if you want exposure to this drop without having to worry about a 4-year lock, cvxFXS is the play! NFA

It also appears that Fraxtal will launch within the next few days/weeks. Feb 7th was thrown around in TG chat!

Cheers Anon!

Follow me @Cryptovestor77 on X for 24/7 Alpha on the Curve and Frax and now the f(x) Ecosystems.

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