Frax Singularity! - Cryptovestor's Alpha Corner #14

March 26, 2024
Frax Singularity! - Cryptovestor's Alpha Corner #14

For those who read my article last week, you know I anticipated that the fee switch would get turned on for Frax, as I saw strange on-chain signs that something was brewing. I think I was right about this! Sam K had mentioned in TG that a sizeable proposal was coming and to be on the lookout for that. Well, the bomb was official dropped a few days ago and what we got was mind blowing! Here are the keep points from the Frax Singularity proposal for you to review. Click here to view the full proposal for more detail.

Frax CR reaches 100%

Fraxtal's launch and achieving nearly 100% Collateralization Ratio (CR)

Frax L3s

L3s of Fraxtal will soon be online, offering distinct identities and benefits, all governed by FXS.

Kickstarting Fraxtal

Fraxtal's Flox Blockspace Incentives distribute rewards block by block to users and developers, a unique feature. The goal is to reach a $100B+ Fraxtal Total Value Locked (TVL) by the end of 2026.

Fraxtal's Fractal Scaling

Fraxtal aims to have 23 L3s within the next year, fostering the Fraxtal Nation community. Official partners will receive additional support from Fraxtal Core Devs and larger allocations of FXTL.

Frax Assets

Frax boasts four tokens/assets in the top 200 in crypto, with potential new assets on the horizon. Each Frax Asset serves a specific utility and design specifications within the Frax ecosystem.

FXS Singularity Tokenomics

FXS is the ultimate beneficiary of the Frax ecosystem, with proposed protocol fee distribution and liquidity engine mechanisms.

FXS Liquidity Engine (FLE)

FLE aims to increase liquidity depth for FXS and paired Frax assets by allocating revenue to buy back both tokens. This mechanism directly increases Fraxtal TVL, liquidity, and lending capacity.

FPIS Resolution

FPIS will be absorbed into FXS to simplify governance and align the community's focus. A proposed merge of FPIS into FXS while maintaining FXS supply under 100m.

sFRAX & sfrxETH

Changes in yield rates and functionality for sFRAX and sfrxETH are proposed to enhance their utility and competitiveness in DeFi. sfrxETH will offer higher APRs and become a leading Liquid Restaked Token (LRT) in DeFi.

I don’t think I can cover the whole thing in one go so I will try to break down individual elements in future, upcoming articles.

I will say however, it did not come without any controversy as some in the community were not happy about certain details surrounding the FPIS merge part of the proposal. At first, it was going to introduce some inflation to the FXS token, which community members were not happy about. I can understand some of the arguments that were being made, however, I felt that some of those concerns were a bit overblown. Regardless, the team went back and redrafted the proposal to include some tweaks to the tokenomics, specifically, the amount one FPIS would be worth when unlocked in 4 years. After this change, all I can say is WOW, the Frax team has been masterful in crafting this proposal and was able to pull off the impossible. Tweaking things just enough to allow for a reasonable token swap while not introducing any additional FXS inflation. The proposal actually got better and made FXS tokenomics even stronger!

Ok, enough for today!

 I will have more to say regarding Frax Singularity in future articles as I learn more about it!

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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