This Week in Frax - November 3, 2023

Samuel McCulloch
Samuel McCulloch
Nov 3, 2023
This Week in Frax - November 3, 2023

Metronome to the Dome Week 4

We are now 4 weeks in and we've earned a total of $13.90 FRAX. Wow, huge gains here. The total captured annualized yield is now 36%! A massive spike from last weeks APR.

This week we want to talk about Metronomes updated tokenomics using esMET, their vote-escrow system. Over the past year Metronome has added Synths, Smart Farming, and integrated with Optimism. With these additions it was necessary to add a token voting system and governance layer with esMET.

esMET is like Curve's system, except that the team added the ability to transfer and exit locked positions early. Additionally with esMET, you can have several independent locks, to maximize returns & time.

Frax.Finance DNS hacked

The last thing you want to see in chat is Fraxi's wondering what's up with the website. On Tuesday evening several people reported that the Frax.Finance website was down or pointing to the wrong DNS.

Sam Kazemian quickly made an announcement to not touch the front end domain and that all contracts and other forms of communication were safe. Quickly, we found out that someone had gained access to Frax's back end on and had changed the DNS.

Frax isn't the first crypto protocol to suffer this attach, Curve, Galxe, Balancer, and many other protocol front ends have been hacked in this way.

Thankfully, the hackers were unable to steal any funds as the TLS certificate remained under the control of the Frax team. Anyone visiting the site during the attack would have been shown a bright red screen telling the user the site was suspicious and potentially could present a risk to them.

Three hours after the initial attack, the team restored the site.

Prisma Raises sfrxETH Deposit Cap

Prisma Finance yet again raised their deposit cap for LSD's across the board this week and also enabled ve-locking for their PRISMA token. With triple digit rates the first few days, the sfrxETH cap was hit in under 24 hours after raising.

In addition to borrow incentives, there are some great yields available for the Curve mkUSDFRAXBP.

As PRISMA is now apart of the Convex ecosystem, this means FRAX has a piece of the voting share to determine liquidity incentives for mkUSD. The above mentioned pairing with the FRAXBP should draw in new capital as liquidity yields are high for the pair for the next few weeks.

PitchFXS to Switch to TBT

This week Hourglass, previously Pitch, founder Charlie Pyle dropped in the chat and shared an ongoing vote for PitchFXS holders to change the locking dynamics from permalocked to timed locked.

The governance proposal comes after PitchFXS has lost its peg by 50% to FXS.

According to the proposal the changes will:

Disable extensions of the existing permanent lock on pitchFXS.

Once the existing lock expires, enable redemptions of pitchFXS for FXS at a 1:1 ratio.

What this means is that at a time up to four years in the future, PitchFXS will be redeemable for FXS. This should close the peg gap over time as purchasers can rest assured they can extract FXS in the future.

Currently, the price of PitchFXS is 2.81, a greater than 50% discount for 4 year locked FXS. NFA, but buying FXS sub $3 might be a good opportunity for those who believe in long term holding.

sFRAX added to Zapper

Frax to Add Native Restaking Support for frxETH

Sam K dropped a hint this week that sfrxETH will be natively integrated with Eigenlayer so people can support restaking. He also said that its been pushed back on the product timeline to coincide with Fraxchain in early 2024 next year.

Additionally he gave more info on Fraxchain, saying "it is a general compute rollup. It’s not an appchain." and also that it should have a diverse variety of apps built on it.

Eigenlayer Votes for sfrxETH

Inverse Votes to Add sFRAX

A proposal was created this week on Inverse's forum to add sFRAX to Inverse's debt market as a collateral asset. Up to 5m DOLA would be available for borrowing against sFRAX. cryptoharry from the Inverse team said that the "Leverage button" would also go live soon.


We learned a bit about the upcoming unlock of TEMPLE/FRAX in chat this week from Grillss. We've posted the conversation he had here in full.

Grills: Can we do something about the FRAX/TEMPLE gauge?

I feel like protocol emissions are completely wasted on it considering the fact that nobody can add LP to it. Temple basically owns an isolated pool after they shut down their STAX product. They did a sneaky bait-and-switch to make people ragequit by first saying they will not bribe the pool anymore and then when everyone ragequitted suddenly they are bribing in a large way again. Since they have isolated the pool it no longer helps the FRAX supply grow, which really is the whole point of having an FXS gauge right?

I'd propose to either force them to open up deposits again so people can LP and actually grow the FRAX supply or have their gauge removed if they refuse.

And I'm sure there's still some way to add liquidity through some complicated smart contract way but let's be real, 99% of people here have no idea how to do it and would probably mess something up if they even tried.

C2tP: I'm not exactly sure on details but sounds like same kind of problem that crazy rebase tokens have where as a holder you would only stake for the rebase Apr cause it's insane and then the protocol becomes the only actual LP. Then you get inefficient incentives cause nothing makes them compete at market levels

mathletamine: Is it actually impossible to re-add back liquidity? If so I would be in favor of discontinuing the gauge. If it's like before that it's just difficult to do it then that's another question.

Grills: Yeah, right now Temple the dao owns like 60-70% of the LP and 6% of all fxs emissions are directed to it. It just seems extremely wasteful that they can have an isolated pool like this since it does nothing to help the FRAX supply.

mathletamine: I guess as long as veFXS bribe market is this inefficient it will be worth it for them to keep doing it.

Grills: Yeah I just feel like it shouldn't be possible to game the system like this. A gauge pool should always be open to add more liquidity, otherwise it defeats the purpose of having a gauge entirely, which is growing frax supply.

C2tP: Yes should always be open. If that's the case, sounds like they could using in bad faith

Lasso: You were big part of the Temple LP at some point and demanded to force out when bribes ended while back, this eventually went to become the first rage quit (but not last) LP, losing a lot of locked liquidity for Frax although making some profit through the discount. Now you are complaining when it has been bribed again by Temple that has a lot of liquidity locked in it and thus helping Frax as an economy, and you want to once again freeride? 🫡

Grills: Yeah when bribes suddenly ended and there was also talk of TempleDefend ending I definitely wanted out. Turns out they didn't stop it and kept defending the peg after all and also suddenly started bribing again afterwards. A nice bait-and-switch.

Turns out the Stake breakdown is broken on that pool and their liquidity is actually unlocking in 24 days. They plan on moving to balancer after that so bribing will stop anyway. Not much point in changing anything anymore then I guess.

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