This Week in Frax - September 22, 2023

Explore Frax’s ARB Grant, v3 Audit, new BasePool, and hiring news! Sam discusses rebasing tokens, Cosmos partnerships, and more! Dive into Francesco’s thread and community updates!

Samuel McCulloch
Samuel McCulloch
Sept 22, 2023
This Week in Frax - September 22, 2023

Frax Applies for 1.5m ARB Incentive Grant

Bullish on Arb? Frax sure is.... On Wednesday this week the Core Dev team posted an extensive grant request to grow FRAX liquidity on Arbitrum. As of writing, there is 36m worth of Frax assets on Arbitrum right now.

The plan for the grant is to use it to boost Frax liquidity with incentives over the next 6 months. With ARB being priced at $.80 this would equate to $200,000 worth of incentives monthly. Frax wants to double its TVL during this time period to 60m and make a bigger market on Arbitrum. Huge.

Frax v3 Audit Complete

PayPal PYUSDFRAX BasePool in the Works

Seal Team Frax is Hiring


Sam Kazemian Q&A

Rebasing Tokens are a Mind Virus

Westwood: What are your thoughts about rebasing treasury stables (USDM) vs 2 token models for staking rewards?

Sam Kazemian: Rebase tokens are a disease. They've done more harm to the industry than any single other "invention" from DeFi. This idea, initiated by Ampleforth, breaks bridges, composability, and causes significant damage and loss of productivity to the industry. Numerous projects and AMMs had to modify their systems and create wrappers to counteract the issues caused by rebasing, resulting in wasted man hours and productivity.

Mark11: OHM rebasing is being turned off in like 2 weeks.

Sam Kazemian: Yes, they moved away from rebasing to gOHM a long time ago when they realized rebasing is a mind virus.

Westwood: The 1:1 meme is probably the strongest part of keeping them as a medium of exchange rather than the staked versions. Staked derivatives have more friction (smart contract risk, floating peg, less liquidity). Liquidity is key.

Sam Kazemian: Rebasing has done extensive damage to the industry. It doesn't work, and there is no meme. The "meme" is stupidity. Even AMMs like Curve have to modify their code to support rebase, which goes to waste when the rebase token gets wrapped back to ERC20 since you can't bridge or do anything with rebase tokens.

Westwood: @samkazemian They’re already wrapping it.

Sam Kazemian: Mind virus.

デサルニエッテミン: It's literally built-in. What a shitshow. Link to documentation

Sam Kazemian: It blows my mind that they’d document how bad of an idea rebasing is but then proceed to do it. They are building a wrapper on USDM called wUSDM to solve integration challenges, similar to Lido's wstETH. This demonstrates the waste of productivity and engineering hours due to rebasing nonsense. To be clear, I’m a fan of USDM, and I’m sure Mountain Protocol will be successful. I’m just pointing out my personal beliefs about rebasing mechanics and why Frax never does them for our stablecoins.

FinresPBC in Prod, Address Trackable

Alberto: So the CR formula is: CR=(Total Assets-Locked Liquidity)/Total Liabilities, Currently 91%. Is that correct?

Sam Kazemian: Yes, that's correct, with one caveat. It is slightly higher than that because a small amount of custodied USDC/fiat has been sent to FinresPBC following the passing of FIP277. This is in preparation for FRAX v3 and sFRAX+FXBs. The first FinresPBC attestation will be in the beginning of October, so that amount will get added to the balance sheet in real time on the beginning of the calendar month. So in reality, the CR is slightly higher than 91% to account for some of the fiat in FinresPBC.

tan: WOW! FinresPBC will be in production from next month!

Sam Kazemian: Yes, sir.

Alberto: That's amazing. Do you have the transaction details so we can see how much it was and where it went, etc.?

Sam Kazemian: Yes, the FinresPBC Circle deposit address is 0x13486FF72c79F8EcD115d04FDbfF9fB732Ad1041. Everything is trackable and transparent at all times. All the holdings will be shown in real-time on the balance sheet just like the current assets once FRAX v3 is launched. It will be very easy to keep track. For brokerage assets and tbills, they will also all be shown in real-time using Plaid and special API tracking integrations. I don't think any stablecoin issuer will have the level of real-time transparency we're planning to roll out.

tan: Some people assume the US would like to see the crypto world take more tbills as a replacement for foreign governments to unload US treasury. If so, FinresPBC is underestimated, FXS is underestimated, and crypto stablecoin is underestimated! USDT is among the top 22 tbill holders, more than some Middle East countries and Australia. Soon, FinresPBC will be among the top 22 tBill holders, lol.

Frax Coming to Cosmos?

Ian: @samkazemian, I was wondering, in light of native USDC, USDT, and canonical wstETH coming to Cosmos (as well as talks of DAI/sDAI), do you have any thoughts on partnering with Cosmos protocols to build out FRAX & sFRAX liquidity in the Cosmos ecosystem?

Sam Kazemian: Yes, we’re very interested in doing that. Which chain are wstETH and USDT issuing on? I know Circle will use Noble, but what about Tether and Lido?

Ian: Tether is on Kava and Lido is on Neutron.

Sam Kazemian: So, they all will issue on different Cosmos chains?

Ian: Yes, tokens in Cosmos can be IBC'd to other chains, so the issuance chain is mostly done based on partnerships/interest on that chain. I would be down to discuss further to help facilitate this! I am representing Mantadao on Kujira; we've got 85% of all wstETH on Cosmos and have already been working with various Cosmos protocols to build POL liquidity for various assets. Would love to facilitate FRAX / sFRAX trading as well.

Sam & Rune = Good Food

Nomada Amador: Mkr eating our lunch 🥪.

Sam Kazemian: Ser, there are enough sandwiches. I just ate lunch with Rune himself a couple of days ago.

Alunara: Wen FraxDeli?

Sam Kazemian: Guaranteed most delicious stablecoin technology.

10delta: Docs soon? Heard that FXBs stands for Frax Burgers & not Frax Bonds. Factual or just a new pasta?

Sam Kazemian: Haha, factual but can become a new pasta too 🍝.



A massive twitter thread by Francesco covers all the juicy details of the upcoming Frax v3, FXBs, sFRAX and more. Deep dive into this for the latest Alpha.

Francesco repeatedly referenced Wajahat Mughal who has done some great investigation into sFRAX yield.

Archimedes adds Convex ETH/frxETH support

Beefy Adds New frxETH Vault

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