Welcome to Frax Check. Your weekly frax vibe check. I am your host Kapital K. As always, I'm joined by my co host DeFi Dave and producer extraordinaire Sam. We will be going straight to the source of truth via checking the chain. Before we jump in, please subscribe to the flywheelpod and follow us @flywheelpod on twitter and tg.
This week.. I call this week the “Holiday Bounce” week. Shimmering of hope.
Let's begin our regular programming with the Peg. We saw it get as low as $0.998 with a high of $1.000 for the week. Peg Check = Strong. We then looked at Curve via swapping 100M FRAX for USDC. We received a 0.9972 exchange rate, which is an increase of 26 bps compared to last week’s. The Frax team has yet to balance the pool so there’s an imbalance of like 75/25 Frax/USDC in the pool right now. Moving on we have our Collateralization %.
This is the % that conveys how much FXS (algorithmic) is used as collateral. We are unchanged over the week at 93.3%. Following we have the Decent %. We bounced off of the lows and have remained unchanged the 14.7%. We’re definitely in the low range but I hope I didn’t jinx us by just saying that. V v v v much bear market vibes across the board when it comes to these two metrics. We want to see the Collat % going back to the low 80s and the Decent % going back to 30s.
Okay. Quick summary Health Check. Peg Good. Curve Swap much better this week. Collat % could be better. Decent % bounce from ATL.
Next, we have our new segment of the check where we look at FrxETH. As always, we check the peg. Peg check here is strong you see the price delta is only 0.0013 between frxETH and ETH. We obvs have to go into the market and check this ourselves and you see here that I tried to do a 3500 ETH swap which is roughly the amount of the largest frxETH holder and I get an exchange rate of 0.9970. That’s not too bad. Also, last week we had 66% of the frxETH staked in the Curve pool, and now we have 61% of the supply inside curve. The APY as per Convex is at 10% projected. Littttt. That’s why everyone is here. Let’s see what the count looks like this week.
The count is at 31,677. And look at that chart, I know you can’t read it but just appreciate the verticalness off that graph. +32%. Hot. On the staked side we see that 39% of all the frxETH is being staked to earn the ETH native staking rewards, which is 5-7% but since only about 40% frxETH is staked, sfrxETH stakers get a boost in their staking rewards. Let’s do a quick summary check.
Peg check strong. Curve swap strong. Count up only. Staked % healthy.
Let's jump into the AMO Holdings. We have a grand total of $549.4M across all the AMOs. This was unchanged compared to last week. The Curve AMO increased by $1M. So no news this week on the AMOs.
Onto the profitability of the Convex AMO. We’re now at $2.17M in Revenue for the month of November. We paid roughly $2.2M in bribes so far plus about $430k in expense. Therefore, for November we have a loss of $460k. No Profit November is confirmed. Let’s hope December fairs better. So far, we have a revenue of $280k with monthly expenses of $430k so the net profit so far is a loss of $150k. But it’s still very early so let’s keep our hopes up.
Quick summary money check. AMO holdings was $549M, +0% WoW. Profitability, for November was downbad but we’re early into December so fingers crossed.
Here's my favorite section of the Frax Check. The Liquidity Check. Do you guys remember the theme of this week, it was “Holiday Bounce” We’re at 68% of the 3POOL. Insert meme “+1%”. The FraxBasedPool is $450.4M versus 3pool's $663M. The basedpool saw a decrease of 1% in TVL. But what’s more troubling is that there’s an imbalance in the FraxBP pool right now of nearly a 25/75 split between USDC/FRAX but since the slippage is manageable the Frax team hasn’t rebalance the pool yet. Also note that the Frax3CRV pool is ABOVE the FraxBP. This is the first time it’s flipped since it passed the Frax3CRV. We need to monitor the situation. Moving on, let’s chat about our metapools.
Reminder the metapool are pools that are PAIRED with the BasedPool, examples like LUSD/FraxBP. We had a significant bounce this week of 17% up to $44M. We got as low as $38M last week so I’m glad to see this relief bounce. Any projects out there looking to work with the Metapool, please join the Flywheel pod TG chat and DM any of the hosts for assistance.
Also one quick note, we also have an additional $12.8M of TVL from non-stable pairs in the Metapools. These are pairs like cvxfxs/FraxBP and cvxcrv/FraxBP. Surprisingly, the non-stable pairs TVL was pretty much unchanged for the week. So adding all of the stables and non-stables TVL, we have a total of $57.2M of liquidity paired against FraxBP, 12.4% increase. Please continue uponly next week please!
Summary time. Liquidity Check. FraxBP is 450.4M which is 68% of 3Pool. The MetaPool is at $44M for stable pairs. And TVL of All pairs (stables + non-stables) are at $57.2M.
Lastly, the main reason why we track all of this is to make sure the FRAX supply could grow as big as possible. This week we're at 1.018B, which is a -0.5% move. We’re flirting with that 9-figure digit line and I don’t like it. We need to keep our eyes on the prize and grow this number. But expect this number to go down a bit, IF the Frax team decides to rebalance the Curve AMO and the FraxBP.
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