This Week in Frax April 14th-21st, 2023

USDP Basepool, WETHR goes live, 150k frxETH and more!!!

Apr 21, 2023

BASEDPOOL

On Wednesday night, Sam Kazemian dropped some serious alpha in the telegram chat. While the information had been public on the Curve forums for two weeks now, this was the first major announcement to the Frax's community about the new USDP basepool.

The new Basepool is one of the global LPs on curve that can be paired against any asset. Anyone can now come and create new LPs paired against FRAXUSDP. We were shocked by the announcement.

What's so interesting about this announcement is that it could have larger implications for the protocol. Paxos had previously approached MakerDAO and offered them a structure where they would take daily snapshots of the TVL, and then pay a fee of approximately 45% coming from their interest income. Assuming that the new baseball is able to reach similar size as USDC, this would project an additional $10 million a year in revenue for FXS.

The new LP will not replace the existing FRAXUSDC BP, it's only a new mechanism to attract liquidity into, and potentially higher yields.

The new base pool is already live on both Convex and StakeDAO.

frxETH WETHR Goes Live!

A new yield incentive program is going live for all frxETH pairs today. This is part of the WETHR program. The goal is to pair as much LSD liquidity as possible against frxETH in Curve. Already the program has attracted a few million dollars in liquidity, and it is expected to grow.

150k frxETH!

20k supply increase in a week!

Potential Qi DAO integration?

Benjamin from Qi DAO dropped in the chat this week to ask if they should add frxETH and sfrxETH to their protocol. Qi DAO is an interest free, multi-chain, borrowing protocol. Their stablecoin MAI can be issued against many different crypto assets. Currently they support only FXS.

Governance

Hackathon

Crossing the line at the last minute, Frax DAO voted to authorize $57.5k worth of FXS towards Fraxbuild, the first ever official Frax hackathon hosted by Dorahacks and powered by Flywheel DeFi.

StakeDAO Tax/Fee

Lucas did some amazing non-paid analytical work to determine the approximate total USD costs of FXS paid for the StakeDAO pool. He has recommended a 7.5% rage quit. Hats off to him for his time and effort to calculate this.