"Up And To The Right" - FraxCheck #62

Feb 7, 2024
"Up And To The Right" - FraxCheck #62

This week... I call this week the “Up And To The Right" week. As the name suggests, this week things are looking good.


  1. FRAX // 95.6% CR
  2. FraxSwap // $95.7M Volume in Jan.
  3. FraxLend // $383k in Revenue in Jan.

Frax Supply & Peg

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We kick the year off pretty much exactly where we left off at $649M $FRAX supply. Nothing else to report here, moving on the peg.

We saw the peg got as high as 0.999 and as low as 0.998. In the market, we saw an exchange rate of $0.991 when swapping up 35M of FRAX for USDC. We're having to reduce the total size of our swap from 100M FRAX to 35M FRAX since the FraxBP went from a high of 600M to 59M TVL. But also because we have a new FRAX/PYUSD pool. Yes that's right, a FRAX/PYUSD, not FRAXBP/PYUSD. Swapping another 25M FRAX for PYUSD also gave an exchange of 0.993.

We currently have $821M in Total Assets, $726M in Liabilities, and $94M in Balance Equity. Big changes this week with Assets up $19.2M, and liabilities increased by $6.2M, which means that the balance increased by $13M(!!).

Collateralization Ratios

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The Collateralization Percentage decreased by 1.6% to 95.6%. We got this number by taking the Total Assets ($820M) subtracting the Locked Liquidity ($126M) then dividing that by the Total Frax Supply (727M).


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As aforementioned, FraxBP's balance remains on the wrong side with an 81.5/18.5 imbalance between $FRAX and $USDC. There was another TVL reduction to balance down nearly 19%, from $73M to $59M. Sadly there isn't an increase in TVL from the PYUSD/FRAX pool to offset this decrease in FraxBP. But maybe that's a good thing.

When we add up all the FraxBP, Frax3CRV, FraxPP, and Frax/PYUSD we receive a total of $197M, which is 1.0x of the 3Pool. There was one point in time when Frax-related pools were 3.0x of the 3Pool.


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sFRAX has been live for about 5.0 months and we are at $27M TVL but we are climbing back to our ATH of $45M.

But the real yield is still here so come get real-world yields via sFRAX now.

The APY at the time of writing is 5.4%. There are 198 sFRAX holders.


The name is Bond, Frax Bond. License to Yield. The long-awaited on-chain bonds have arrived.

Three tranches were being auctioned off with nearly $3M across each of them! The expiries are June 30th, 2024, December 31st, 2024, and December 31st, 2026.

The YTM ranges between 3.78% to 5.79%.

Users could purchase these bonds and then LP them into Curve with FRAX stablecoin to earn up to 27% APY in rewards. Wild. There are $6.6M TVL across all the Curve pools. The liquidity is deep so enjoy the waters.

FrxETH supply and distribution

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Now onto the crowd favorite, le frxETH. There is 311,247 frxETH, which is a -0.5% drop.

Not much movement in the frxETH supply.

FrxETH peg

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Reminder, frxETH is still a stablecoin, just a stablecoin pegged to ETH instead of the dollar. In the markets, we swapped 3.5k frxETH for ETH via Curve and received an exchange rate of 0.997.

Total frxETH liquidity on Curve is at $181M across 3 pools. The blended balance across these pools is 71% frxETH and 29% ETH, wETH, and stETH.

Competitive landscape

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Speaking of landscape, let’s look at the LSD market.

We held onto 2.4% of the market. For the last 30 days, we've grown 2.5% but our competitors such as rETH grew by 2%. And we have a new contender Mantle Staked ETH growing at 136% over the last 30 days and they're right now flipped us with 416k staked ETH. Then there's another contender StakeStone (Manta Network) with 295k ETH which is less than 20k ETH from flipping frxETH.

In the yield department, frxETH is completely dominated by Mantle Staked ETH's 7.7% APY. Even though frxETH is ahead of all our other competitors with a 3.8% APR. The competitors are closely behind though so there is no resting!


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The final stablecoin: FPI. The Annual Inflation Index is now at 3.3%. Good thing that the FPI is still above Peg by 30 basis points. The treasury consists of $93.1M with an excess equity of $5.3M.

As inflation decreases and the treasury continues to earn high yields, the excess equity will continue to be built up in FPI's treasury.


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FraxLend's operating at peak performance – holding onto its $301M TVL as well as nearly $85M in borrows. An 80% utilization rate is healthy. I like to see utilization in this range – it keeps the interest rate high enough for suppliers while still providing ample liquidity for borrowers.


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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. There are only $71.5M TVL across all the pools. But in January, this DEX turned over 133% of its TVL. LFG.


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Revenue, Expenses, Profit

Show me the money! Well, here it is.

Let's look at the FraxLend AMO as that's one of the key revenue drivers with $308k so far in January.

Another revenue stream from FraxLend is liquidation fees. For January we generated nearly $75k. There was one big liquidation for $62k.

FPI continues with a green profit month in January with $67k in earnings. Fortunately, this contributed to the treasury's equity balance of $5.3M.

Lastly, if we do some rough math we could estimate the run rate of frxETH at $1.68M for the year. The math goes as such: 25 frxETH rewards per day* 365 days * 8.0% fee rate * Price of ETH. Then divide that by 12 to get the monthly figure of $140k per month or 61 ETH.


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.

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