"The Good, The Bad, and The Ugly" - FraxCheck #63

Feb 20, 2024

This week... I call this week the "The Good, The Bad, and The Ugly" week. As the name suggests, we have some green and red.


  1. FRAX // 97.2% CR
  2. FXB // $12.5M TVL
  3. frxETH // Out of Top 5 (6th Place)

1. FRAX // 97.2% CR

What a journey to arrive at this point. We haven't seen a 97% print on our Collateral Ratio in months. It's been a long slog to get here and we're going to keep on keeping on.

The FRAX supply remained the same at $650M for the past 3 months but what changed is our Assets.

Assets bumped up by $20.7M (+3%), while Liabilities only increased by $4.9M so that means the Equity Balance saw a very healthy step-up of $15.8M (+17%). This contributed to our CR going from 95% to 97%.

In terms of liquidity, we're hanging in there. There's about an equal amount of Frax-related liquidity pools on Curve versus the native 3Pool.

2. FXB // $12.5M TVL

One of the most recent products introduced is FraxBonds. And we're already seeing some adoption for this product.

These bonds start on Frax's main website, where they are auctioned off in tranches with varying maturity dates – always expiring on Jan 01 and July 01. Currently, there are $9M available for auction.

For the FXBs that are already liquid, the majority of them are in liquidity pools on Curve (Ethereum and Arbitrum). Some pools are paying up to 50% APR.

Another FRAX-related product that was released late last year was sFRAX. It's Frax's Treasury Bill yields product. We also saw some movement here this week with an increase of 14% in TVL up to $30.9M. Our All-Time-High TVL was around $45M so we're working our way back there.

3. frxETH // Out of Top 5 (6th Place)

We can't have all good things. Unfortunately, we're experiencing a downtrend for the crowd's favorite product: frxETH.

Not only did we see a drop of nearly 1% (308,553 frxETH) but also our market share dropped by 8%.

Previously, we were in the top 3. stETH was number one then there was rETH and frxETH in third. Binance's staked ETH came and blew right past us but that was expected (duh, it's Nance). But when Mantle's mETH and Manta's Stone entered the scene, we got smoked.

This week we are no longer in the Top 5 of the staked ETH product providers. We're 6th. Out of all the contenders, we were the only one that had a negative 30-day growth statistic.

More importantly, we even got defeated in the yield department by Mantle's mETH. Granted, the mETH yields are subsidized and may or may not be sustainable but the fact is that it's working and it's dominating the yield game.


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Revenue, Expenses, Profit

Show me the money! Well, here it is.

Let's look at the FraxLend AMO raked in $197k so far in February – averaging about $66k per week.

Another revenue stream from FraxLend is liquidation fees. For February we generated nearly $20k. There was one big liquidation for $16k.

FPI continues with a green profit trend in back-to-back months. February profits are $67k.

Lastly, if we do some rough math we could estimate the run rate of frxETH at $2.0M for the year. The math goes as such: 23.9 frxETH rewards per day* 365 days * 8.0% fee rate * Price of ETH. Then divide that by 12 to get the monthly figure of $175k per month or 58 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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