"No Profit November!" - FraxCheck #16

This week is the “It's beginning to look a lot like FraXmas because there's red everywhere with some green”-week.

Nov 30, 2022

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 is the “It's beginning to look a lot like FraXmas because there's red everywhere with some green”-week.  Let’s dive in.

Let's begin our regular programming with the Peg.  We saw it get as low as $0.999 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 0.9946 exchange rate, which is an increase of nearly 62 bps compared to last week’s.  The Frax team has yet to balance the pool so there’s an imabl 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 are now at the 14.7%, which is a 12.2% increase from last week’s Frax Check.  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 0.0007 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 8400 ETH swap which is about $10M and I get an exchange rate of 0.9939.  That’s not too bad.  Also, last week we had 65% of the frxETH staked in the Curve pool, and now we have 66% 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 24,023.  And look at that chart, I know you can’t read it but just appreciate the verticalness off that graph.  +41%.  Hot.  On the staked side we see that 33% of all the frxETH is being staked to earn the ETH native staking rewards, which is 5-7% but since only a third of frxETH is staked we can multiply that 5-7% by 3x.  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 $548.5M across all the AMOs.  This was an increase of 9% compared to last week.  A healthy lil bump here.  The Curve AMO increased by nearly $40M.  These are wicked AMO moves.

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.  We at the flywheel team dug deep into the profitability here and figured out the bribe cost more accurately.  We are indeed in the red this month.  No Profit November is upon us.

Quick summary money check.  AMO holdings was $548M, +9% WoW.  Profitability, we’re down $460k.  Claps all around.

Here's my favorite section of the Frax Check.  The Liquidity Check.  Do you guys remember the theme of this week, it was “It’s beginning to look a lot like Fraxmas”.  We’re at 66% of the 3POOL.  Insert meme “+1%”.  The FraxBasedPool is $454.9M versus 3pool's $694M.  The basedpool saw an increase of 1.2% 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 that needs to be rectified.  So expect the FraxBP to decrease even more but note here 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 pretty much retraced all of our momentum for the last 13 weeks.  We’re currently at $38M, which is a 13% decrease WoW.  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 $12.9M of TVL from non-stable pairs in the Metapools.  These are pairs like cvxfxs/FraxBP and cvxcrv/FraxBP.  Surprisingly, the non-stable pairs TVL went up by 10% ish when compared to the stable pairs.  So adding all of the stables and non-stables TVL, we have a total of $50.9M of liquidity paired against FraxBP, 7.5% decrease.  Please resume uponly next week please!

Summary time.  Liquidity Check.  FraxBP is 454.9M which is 66% of 3Pool.  The MetaPool is at $38M for stable pairs.  And TVL of All pairs (stables + non-stables) are at $50.9M.

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 1.023B, which is a -13% move, the largest move we’ve seen since middle of last month.  We need to keep our eyes on the prize and grow this number.  But expect this number to go down a bit from us rebalancing the Curve AMO and the FraxBP.



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Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research.

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