TOP 3 TL;DR
- FraxBP // FRAX-related pools are 2.8x of 3Pool
- frxETH // 2.3% Market Share
- FraxLend // $250k liquidation fee
Frax Supply & Peg
We have supply remaining flat, the peg range is tight, and the Curve swap exchange rate is at $0.9982. This isn’t too bad but definitely on the borderline. Aside from that, not much to report here so let’s move on to the Collateralization and Decentralization Percent.
Collateralization & Decentralization Ratios
Flat across the board for the past 8 Frax Checks. We saw a slight bump in the Decentralization % to 22.3%. Nothing much to report, moving on.
FraxBP
FraxBP TVL is staying strong above $600M for the past few weeks. The volume for June is quite respectable at almost $146M which is 24% of the TVL. Frax liquidity pools are now nearly 3x that of 3POOL. We are in a new regime in the Frax-Curve flywheel relationship.
IQ Staking
Did you know that BrainDAO was founded by Sam K before he founded Frax Finance? That’s right! BrainDAO’s flagship product is their IQ.wiki, which is the crypto encyclopedia. We have nearly all of our Flywheel guests wiki page on there so be sure to check that out!
Additionally, you can stake IQ today to earn a whopping 112%. There are 1812 holders of IQ on Ethereum but only 180 are staked. There’s definite value in staking as the treasury is $15.4M. There needs more governance power to secure and direct the treasury.
Be sure to go to the staking page today here.
FrxETH supply and distribution
Now onto the crowd favorite, le frxETH. We rocking strong here with 232,004 frxETH supply, an 1.8% increase from last week — frankly one of the lowest growth rates we’ve seen.
FrxETH peg
Reminder, frxETH is still a stablecoin, just a stablecoin pegged to ETH instead of the dollar. So we must check the peg. Here the dashboard shows 0.9989, a fairly strong rate, but we can’t just rely on dashboards. In the markets, we swapped 3.5k frxETH for ETH via Curve and received an exchange rate of 0.9983. This is getting close to the 0.9970 rates that we do not want to see.
Competitive landscape
Speaking of landscape, let’s look at the LSD market.
We are FLAT!
We are at 2.33%. We saw strong growth over May but since June started we’ve been bleeding down. But at least frxETH is leading the pack in the yield department. Offering a nice 5.1% APY of that sweet native ETH yield. The yield is also particularly lowered since the validator queue is still quite long.
FPI
The FPI has remained quiet for some time now since the release of veFPIS. We saw a flat week this week so nothing to report.
Fraxlend
FraxLend had an amazing week, frankly the last couple of weeks. We see the collateral value and the borrowed value drop off a cliff after the market chop suey liquidated a bunch of folks.
Another point is that the CRV and FXS pairs are popping off, offering great yields at 7 and 9% respectively. If one’s looking to lever up, the sfrxETH/FRAX pair is still quite cheap at 3.5% to borrow.
Fraxswap
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 but it’s pushing out major volume relative to its size. There are only $69.5M TVL across all the pools. For the month of June, there was $46.9M volume facilitated across all the FraxSwap pools.
Profitability
Revenue, Expenses, Profit
Show me the money! Well, here it is.
For June, we’re at a loss of $205k for the Convex AMO. On the FraxLend front, even though we didn’t increase the AMO, we generated $92k in revenue. Unfortunately, we had a lot of liquidation this month. Good for the protocol’s bottom line but not great for the users. There was $250k worth of liquidation fees.
Following we have the frxETH revenue which we calculated by taking the quantity of frxETH multiplying it by 7% for the staking yield then multiplying again by 8% to get Frax’s fee share then a final multiplication with the price of ETH and finally dividing that by 12 to get the monthly figure, which is $200k — awesome. Lastly, we have the FPI which generated $27.5k in profit, that is after the requirement for the peg.
That is it for this week’s Frax Check #45! We hope you guys enjoyed this one and see you next week to welcome in the month of June!
ACCESS TO SLIDES: Here
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.
