"Merry FraXmas!" - FraxCheck #59

Dec 27, 2023
"Merry FraXmas!" - FraxCheck #59

This week... I call this week the “Merry FraXmas!” week. As the name suggests, the holidays are upon us. We at Flywheel wish you a happy holiday and a happy new year!


  1. FraxBP // -22.4% at $104M TVL
  2. FraxLend AMO // December Revenue $290k
  3. $FRAX // 95.4% Collateral Ratio

Frax Supply & Peg

So we end the year at $649M $FRAX supply. Nothing else to report here, moving on the peg.

We saw the peg got as high as 1.000 and as low as 0.999. In the market, we saw an exchange rate of $0.992 when swapping up to 80M of FRAX for USDC. We're having to reduce the total size of our swap from 100M FRAX to 80M FRAX since the FraxBP went from a high of 600M to 100M TVL.

Nice little bump on the assets side of the balance sheet, +$4.1M, for this Frax Check. But our liabilities decreased by $0.6M, so our equity increased by $4.8M. We currently have $805M in Total Assets, $720M in Liabilities, and $86M in Balance Equity.

Collateralization Ratios

The Collateralization Percentage increased by 80 basis points up to 95.4%. We got this number by taking the Total Assets ($805M) subtracting the Locked Liquidity ($118M) then dividing that by the Total Frax Supply (720M).


As aforementioned, FraxBP's balance remains on the wrong side with a 75/25 imbalance between $FRAX and $USDC. So we suspect to see another TVL reduction to balance this out.

When we add up all the FraxBP, Frax3CRV, FraxPP, and PYUSD we receive a total of $172M, which is 0.91 of the 3Pool. There was one point in time when Frax-related pools were 3.0x of the 3Pool. Now we march upward.


sFRAX been live for 13 weeks and we're down 55% of ATH of $45M. The current TVL is $20M.

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 176 sFRAX holders, which is holding steady for the 2 months. But we suppose it's normal to see a decrease in TVL as the market becomes more risk-seeking plus we're seeing more borrowing in FraxLend.

FrxETH supply and distribution

Now onto the crowd favorite, le frxETH. We've been going through a pretty sluggish period of low single-digit growth. And the for the last 2 weeks of 2024, we've only grown 1.9%.

Not much movement in the frxETH supply. frxETH's monetary premium jumps to 9%! This means that 9% of the supply of frxETH holders are happily holding or utilizing frxETH outside of the Frax native ecosystem.

FrxETH peg

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 0.986.

Total frxETH liquidity on Curve is at $172M across 3 pools. The blended balance across these pools is 75% frxETH and 25% ETH, wETH, and stETH.

Competitive landscape

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

We held onto 2.5% of the market. For the last 30 days, we've grown 3.8% but our competitors such as rETH grew by 4.2%. Though Lido did experience a -1.18% drop in 30-day growth.

In the yield department, frxETH is leading the pack with 4.3%. The competitors are closely behind though so there is no resting!


The final stablecoin: FPI. The Annual Inflation Index is now at 3.1%. Good thing that the FPI is still above Peg by 1 basis points. The treasury consists of $92.8M with an excess equity of $4.7M.

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


FraxLend's operating at peak performance. We've found a good level at around 285M-ish TVL with $76M borrowed. An 84% 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.


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 $69.7M TVL across all the pools. For December, this DEX turned over 88% of its TVL.


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 $290k so far in December.

Another revenue stream from FraxLend is liquidation fees. For December we generated $46.5k – not too bad. But again, stay safe out there folks.

FPI continues with a green profit month in December with $139k in earnings. Fortunately, this contributed to the treasury's equity balance of $4.7M. And this treasury may soon be combined in with that of FXS'.

Lastly, if we do some rough math we could estimate the run rate of frxETH at $1.65M for the year. The math goes as such: 25.5 frxETH rewards per day* 365 days * 8.0% fee rate * Price of ETH. Then divide that by 12 to get the monthly figure of $138k per month or 62 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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