This Week in Frax - July 7, 2023

The Balance Sheet, Ouroboros' investment report, BD grant proposal, rage quit round 3, and Dogelon Mars lists sfrxETH.

Samuel McCulloch
Samuel McCulloch
July 7, 2023

The Balance Sheet

Stop the Presses. We gotta jam about the newly released balance sheet for a while. It’s entirely unprecedented what the Frax team just did. It’s the first fully transparent, block-by-block live balance sheet in the world. No off chain assets, no fluff. Just contracts and data.

Ouroboros FXS Investment Analysis Released

We interviewed Ou this week in our latest episode. He dropped a ton of information about his just released investment research for FXS.

FXS: Coiled Spring
FXS: Coiled Spring Overview This report details our investment thesis on Frax Finance (FXS) - currently one of our highest conviction ideas within the crypto space over the next 6-12 months. We see FXS outperforming the majority of other tokens in the same time period and this report serves to communicate the premise to our views.

To quote his report

Summary: Our investment thesis on FXS is simple. We see an asymmetric risk:reward in buying FXS given 1) the valuation support at these levels and 2) the high likelihood of significant incremental value that the market is likely to attribute to the token in the next 6-12 months.

Check out our episode with Ourosboros and go read his report. It’s valued all the individual parts of Frax and extrapolated future market caps based on that.

Ouruboros Recommends a BD Grant

We like his idea. It’s simple, will expand the protocol and maybe Flywheel can manage it.

Another Rage Quit?

Grills is back again with another Rage Quit vote for the Gelato FRAX/DAI pool that has $2.9m of locked liquidity. He wants to implement a 20% rage quit fee for those who want to exit early. There is only 500-ish days left, so it might pass this time.  He writes:

Also I do genuinely believe that $600K of profits for the protocol at the cost of a small loss of 2.9M TVL (which is getting unlocked in +-500days anyway) is +EV for FRAX especially in a time where we are trying to get to 100% asap.

The sooner we get to 100% CR the better imo so we can put out frxeth revenue to more productive use.

I assume most (possibly all) would take the ragequit yeah. There are plenty of opportunities in the market again where you can make very nice apr. So taking a 20% cut now as opposed to having funds stuck for +-500 more days earning basically zero seems sensible

Sommelier Launches Fraximal Vault

The Somm team announced the launch of their Fraximal vault, which allocates Frax to the highest yielding Fraxlend pairs. They write:

This vault will automate the process of capturing the highest interest rates available at any given moment, while also mitigating risk by ensuring that the vault is not overly exposed to any specific lending pool at a time. The strategists estimate that yields on the vault could range between 6–20% net of fees depending on vault TVL and overall market conditions.

Dogelon Mars Adds sfrxETH as a Liquid Staking Option

The Dogelon team added a page to easily stake ETH for sfrxETH. Their interface is very on point and has great visuals :)

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