crvUSD Launches with sfrxETH as Collateral
The biggest news of the week was that sfrxETH was chosen to be the first collateral for crvUSD. We had gotten cookie crumb ideas of this before the contracts went live, but when the code went public, it was a joyous time in the Telegram chat making the discovery.
Michael said in a livestream on Friday with Leviathan News that sfrxETH was chosen because it was an LSD with the most optimal oracle information, a key part of crvUSD’s design.
The entire Flywheel team plus Drake and did an hour long celebratory livestream when the contracts dropped as well.
veFXS rewards.. Buybacks or Distributions
There was a healthy debate in the telegram chat this past week about how rewards should be distributed in the Frax's ecosystem. Right now all of the profits are in by Frax are used to buy back FXS and then distribute that to veFXS.
The topic came up when Luffy Monkey asked what happens when CR hits 100%. He was asking where the value of FXS would come from once FXS was not used to mint FRAX.
The question boils down to, how should rewards be distributed. There are two competing options.
Option 1 Buy back and distribute FXS - This is the current regime. Excess profits are used to buyback FXS on the open market and then are given as yield to veFXS.
Option 2 Distributed rewards as FRAX and frxETH - If passed through a governance vote, Frax could distribute excess revenue in the form it earns. While the gas savings will be minimal, it would lead to reduced buying pressure on FXS.
On the face of it, there is no significant difference between the two options. However, the FXS buy backs put the gov token in the hands of those who have a long term outlook for the project.
As usual, C2tP put the nail in the coffin of the discussion.
DeFi Dave Takes Over Zuzalu
In between cold plunges, AI alignment debates, and general nerd sniping, Dave led a well-regarded talk on stablecoin maximalism.
It’s coming. Soon TM.
Also frxGov is heading to audit this month and frxETHV2 is underway.
frxETH fees ticking upwards
Thanks to $PEPE and other onchain activity, ETH gas has been at yearly highs. Validators are rejoicing as the MEV tips are a larger source of income.