"The Slow Bleed" - FraxCheck #42

This week... I call this week the “The Slow Bleed” week. As the name suggests, this week we're slowly bleeding downward on some key metrics.

June 6, 2023


  1. frxETH // ∆ -0.8% drop in marketshare
  2. FRAX // 0.9974 exchange rates
  3. FraxLend // ATH Collateral Value and Borrowed

Frax Supply & Peg

We have supply remaining flat, the peg range is tight, and the Curve swap exchange rate is at $0.9974. As we’ve said, we do not like to see a 7 number at that rate. Things have been a slow bleed on this rate. 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 7 Frax Checks.  Moving on.


Nothing much to report here out of the usual.  FraxBP has been hovering around $500M for the past few weeks.  However, the volume for June so far has been abysmal.  Frax liquidity pools are now nearly 2.2x 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 116%. There are 1758 holders of IQ on Ethereum but only 180 are staked. There’s definite value in staking as the treasury is $116.3M. 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 235,026 frxETH supply, an 2.3% increase from last week — frankly one of the lowest growth rate 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 0.9988, which is also a very strong exchange rate. Arguably, one of the best rates in the LSD landscape.

Competitive landscape

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

We are DOWN!

This is the first time we actually lost market share.  We were at 2.47% but now we’re at 2.45%. We saw strong growth over May but this is definitely a slow start to the month. The bad news continues as frxETH is in the middle of the pack this week in the yield arena. Here we witnessed one of the lower APYs at 4.7% — but still it’s that sweet native ETH yield.  The yield is also particularly lowered since the validator queue is still quite long.


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 had an amazing week, frankly the last couple of weeks.  The collateral value and the borrowed amount are back up to levels before the USDC crisis.  The Utilization rate is also climbing back to its usual high 70s, mid-80s level.

Another point is that the CRV and FXS pairs are popping off, offering great yields at 8 and 9% respectively.  If one’s looking to lever up, the sfrxETH/FRAX pair is still quite cheap at 2% to borrow.


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 $63.8M TVL across all the pools.  Though this has been one of the slower weeks since our usual FXS/FRAX pair normally facilitates $15M in volume but, this week we only processed $5M.


Revenue, Expenses, Profit

Show me the money! Well, here it is.

As mentioned, the Convex AMO paid the bribes on the 30th of May so in June we get to reap the rewards.  One week into the month and we’re at $193k for the Convex AMO.  On the FraxLend front, even though we didn’t increase the AMO, we generated $22k in revenue.  Another important element is that the FRAX in FraxLend is at a 90% utilization rate.  Unfortunately, we had one liquidation a few days ago but it was a small one with only $300 in 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 $202k — awesome. Lastly, we have the FPI which generated $8.8k in profit, that is after the requirement for the peg.

That is it for this week’s Frax Check #42! We hope you guys enjoyed this one and see you next week to welcome in the month of June!


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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