"Signs of Life" - FraxCheck #58

Dec 12, 2023

This week... I call this week the “Signs of Life” week. As the name suggests, we're at a point where we have so many exciting developments ahead but we have darkness in front of us.


  1. $FRAX // $20M drop to $650M
  2. $frxETH // 300k Supply
  3. PYUSD // $13M added to Treasury

Frax Supply & Peg

FRAX supply dipped down nearly 3% to $649M. 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 is still imbalanced at 70/30.

Small drop on the assets side of the balance sheet, minus $12.9M, for this Frax Check. But our liabilities decreased by $19.6M, so our equity increased by $6.5M. We currently have $801M in Total Assets, $720M in Liabilities, and $80M in Balance Equity.

Collateralization Ratios

The Collateralization Percentage increased by 90 basis points up to 94.6%. We got this number by taking the Total Assets ($801M) subtracting the Locked Liquidity ($119M) then dividing that by the Total Frax Supply (720M).


As aforementioned, FraxBP's balance remains the wrong side with a 70/30 imbalance between $FRAX and $USDC. We might see another rebalance thus reducing the FraxBP TVL again. Recall that earlier we had to remove like $300M in liquidity.

When we add up all the FraxBP, Frax3CRV, FraxPP, and PYUSD we receive a total of $191M, which is 1.0x of the 3Pool.


sFRAX been live for 11 weeks and we're down 55% of ATH of $45M. The current TVL is $21M.

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 186 sFRAX holders, which is holding steady for the 1.5 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 broke the 300k mark! Though, this was only a 1.9% increase.

Not much movement in the frxETH supply. frxETH's monetary premium remains at 6%! This means that 6% 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 0.998.

Total frxETH liquidity on Curve is at $168M across 3 pools. The blended balance across these pools is 73% frxETH and 27% 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 3.7% but our competitors such as rETH and stETH, grew by 3.3% and 3%, respectively.

In the yield department, frxETH is second in the pack with 4.0%. The competitors are closely behind though so there is no resting!


The final stablecoin: FPI. The Annual Inflation Index is now at 3.2%. Good thing that the FPI is still above Peg by 4 basis points. The treasury consists of $92.8M with an excess equity of $4.8M. Over the past 2 weeks, the equity portion increased by $600k.

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 stable. We've found a good level at around 284M-ish TVL with $67M borrowed. A 79% 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 $70.3M TVL across all the pools. For October, this DEX turned over 45% 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 $190k so far in December. FRAX Lent decreased to $66M this is a breakout of the $62.5-$65M range that we were in for quite some time.

Another revenue stream from FraxLend is liquidation fees. For December we had two massive liquidations of $11k and $20k. These are massive positions that were liquidated.

FPI continues with a green profit month in December with $81k in earnings. Fortunately, this contributed to the treasury's equity balance of $4.8M.

Lastly, if we do some rough math we could estimate the run rate of frxETH at $1.5M for the year. The math goes as such: 23.7 frxETH rewards per day* 365 days * 8.0% fee rate * Price of ETH. Then divide that by 12 to get the monthly figure of $127k per month or 57.7 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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