Yield of the Week - VaultCraft's FRAX Smart Vaults
VaultCraft launched the very first locked incentivized yield vault for Arbitrum Fraxlend deposits today. The vault supports the ARB/FRAX pair on Fraxlend, with the goal of increasing its borrowing capacity and usage.
Working in cooperation with Frax, the Frax Smart Vaults will be distributed ARB rewards as part of the ongoing Arbitrum STIP grant distribution.
Users can deposit their FRAX on Arbitrum into the Smart Vault to create a money market on Fraxlend. The Smart Vault deposits your FRAX deposit as collateral on Fraxlend for fTokens in return. These fTokens represent your deposited amount and accrue interest over time. The interest is generated from the borrowers who pay to borrow funds against their collateral.
The vault allows you to lock your FRAX in the Fraxlend pair to be borrowed for a maximum of 6 months. Depending on how long you lock, you get a bigger share of the ARB rewards.
- Max locking for 6 months gives you 100% of the pro rata share of the ARB rewards for the STIP period
- 3 months gives you 50% of your pro rata share
- 1.5 months gives you 25% of your pro rata share
The FRAX Smart Vault distributes ARB (and soon FXS rewards) based on the the Frax AID mechanics:
- Maximum Incentive APR: 4%
- Kickstart Period: 2 weeks
- Kickstart Maximum Budget: $500 per week
Once you deposit and lock your Frax in the Smart Vault, you will earn ARB rewards throughout the lock-up period. You will be able to withdraw your initial FRAX deposit once the lock-up period is over. You will be able to manually withdraw your FRAX after the lock matures.
The new addition of Fraxlend incentives for Arbitrum is a good sign that the money market is set for growth and we could potentially see new collateral assets added in the near future.
Frax turns 3!
1,095 days have passed now since the launch of Frax and FXS, with and incredible amount of highs and lows, billion dollar market caps and black swans defining the early history of the Frax protocol. This year was packed from the beginning of the year all the way until now.
Read up on our Frax Year in Review to relive everything that happened this year.
2024 Alpha Alert with Sam Kazemian on Spaces
Flywheel hosted a must listen to Spaces on the anniversary of Frax's launch. DeFi Dave grilled Sam K for an hour on the future of all things Frax and extracted a ton of alpha about the upcoming releases of Fraxchain, FXBs, BAMM, the new Centrifuge partnership, Paypal's PYUSD and more.
We covered all the details in Yesterday's newsletter, go check it out to get in the loop.
Binance Integrates Frax to their Web3 Wallet
Wow, this wasn't on our Frax Bingo card this week! Sam K dropped in chat that the Core Dev team is having meetings with Solana and that Frax might see native deployment on the network in the near future.
Chuck Beard asked if he should wait to lock up his FXS as veFXS until after Fraxcahin launches to take advantage of the new features. Sam K told him that support will be native for both chains at launch and that veFXS balances will be unified across networks.
Westwood asked about partnering with Tether to increase FRAX usage and create new markets for DeFi. Sam indicated that the focus for next year will be on PYUSD, but that Tether is a "force" and will hopefully be included for minting natively on Fraxchain.
We love the term NewFi