This Week in Frax - September 15, 2023

FPIS Buyout, Convex Fee Changes, Frax Monthly Report, FPI + Base and more...

Samuel McCulloch
Samuel McCulloch
Sept 15, 2023
This Week in Frax - September 15, 2023

FPIS Buyout Incoming?

With all the hype around FXB launching soon, questions have been popping up about the short term demand and use for FPI. In a complete turn of events from last year, inflation has declined from highs of 7% down to 3%, while bond yields have spiked from near zero to over 5%.

This shift has caused massive reallocations of capital as investors are revaluing risk assets in light of rising interest rates.

This week TG anon 0xmeki said in the chat that "linked governance tokens are a big mistake and should be killed better sooner than later. Change my mind." He was referring to FPIS, the subDAO governance token for FPI that Frax airdropped last year. This started off a long discussion about what outcomes would be beneficial for Frax DAO in the long term.

Sam Kazemian: So you also don't like MakerDAO's subDAO tokens either right? Linked gov tokens are basically a more formalized way of doing that.

0xmeki: Yea, I guess I don’t. Doesn’t make sense to me to introduce new shares with each product. I will also not buy iPhone iPad and MacBook shares. I guess one could compare it to a worse stock split as it got airdropped.

Sam Kazemian: Would you be supportive of a community-led proposal to merge FPIS back into FXS (aka turn FPIS tokens into FXS) in the future when the CR has reached 100%? That way everyone can combine back into 1 gov token distribution

If that were going to happen, then the FPIS token's value basically becomes the future expected value of FXS at the time of merging of tokens. So basically holding FPIS now is some expected value that it turns into FXS later. 🤔 So another way to put it is possibly buying FXS at a discount if the merger happens.

Well idk, I'm just giving ideas. This isn't something I'm personally about to post or anything. It should be community led. But also, I think at minimum the time to a merger that I would ever support is after the CR is 100% for FRAX. But overall I'm open to the idea of a merge of FPIS into FXS at some time in the not-too-distant future.

Len: I don't see any upside for FXS holders to agree to such a merger though

Sam Kazemian: The profits in excess of 100% CR that FPI balance sheet has. Right now, FPI is over 100% CR. FRAX is actually not.

0xmeki: Seems very reasonable and a path to explore. Especially now that frax products are popping up left and right. I like consistency.

Summary: So while FPI yields would be underpreforming FXBs right now if they were launched, FPI still has long term importance to the Frax ecosystem.

The question at hand though is should Frax engage in issuing new subDAO tokens for each product it launches? When FPI was launched, the idea was that FPIS was necessary to support and backstop the balance sheet in case CPI ever outpaced the ability of the DAO to earn enough revenue to cover FPI price increases.

The sentiment now in chat is that FPIS's role might be better served by the Frax DAO and FXS rather than a subDAO. And in turn, Frax should buyout FPIS token holders at a future date once the CR is at or above 100%.


Frax Publishes Monthly Report

Check out the official update from the Frax Core Team on the past month's events and happenings

Frax Finance Monthly Report #31 | September 2023.
A round-up of Frax Finance updates in a few minutes.

Frax + Base + FPI

After Brian Armstrong dropped his top 10 list of products he wants to see on Base, his #1 pick was an inflation adjusting stablecoin or Flatcoin.  

Thankfully, we already have deployed a Flatcoin at Frax for over a year now... FPI.

In the chat this week Sam K confirmed that they are working on a "more formal partnership and support on Coinbase for FPI."  He went on to say that since FPI is still permissionless and that Frax is going to launch FPI and FPIS on Base soon. Sam K said Frax is "going to do that soon regardless 😎."


Big Changes Coming to Convex

There is also a vote on Convex right now to raise cvxFXS fees to add to the treasury and build cvxFXS POL.


L2D4 Rage Quit Contract Goes Live

  1. On Arbiscan, call stakerAllowMigrator(0x67218f66a84809201CfBa5c8b46dBd3aB95A42da) on the Arbitrum Saddle L2D4 farm at 0xd1dF24e8D225b20F9c8f4912BE88cCCec93f36E5. This will allow the RageQuitter to "migrate" for you. Use this 0x67218 address, NOT your own. https://arbiscan.io/address/0xd1df24e8d225b20f9c8f4912be88cccec93f36e5#writeContract#F18
  2. Go to the RageQuitter contract at 0x67218f66a84809201CfBa5c8b46dBd3aB95A42da and do rageQuitAll() https://arbiscan.io/address/0x67218f66a84809201CfBa5c8b46dBd3aB95A42da#writeContract#F1
  3. You should now have all unclaimed rewards + 80% of your LP. 20% goes to the Frax protocol as a penalty per the Snapshot vote https://snapshot.org/#/frax.eth/proposal/0x41a2ef2d68725654b73ea5ac05410822f32ef2473a61ef7b7c4827b9705400d4

Link to L2D4 pool - https://saddle.exchange/#/pools/L2D4/withdraw


New NFT-Enabled Gauge System

In the chat anon 𝕍 𝚒𝙽𝕔 ⊿ ⅇⁿ 𝖙𝖑𝔥𝖈 asked "Perhaps we should consider putting the fraxcrvusd LP on Pendle so people have the tools to lock in a fixed rate yield 😬"

Sam K replied "Yes the new gauge system we're working on has NFT tokenized positions 🙂 They can be integrated in different places like Pendle or other protocols."

Charlie Pyle founder of Hourglass added that "NFTs can natively be fractionalized and traded on Hourglass (market for time-locked assets)"


Mughal's Great Thread on FXB


Stablescarab on LSD Summer


Notional Finance V3 Beta


Origin Finance OETH Update


Prisma Finance sfrxETH Update


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