"Transparency Maximalism" - FraxCheck #47

This week... I call this week the “Transparency Maximalism” week. As the name suggests, this week we're going full transparent mode.

July 11, 2023


  1. FRAX // Balance Sheet ($1,118M Assets, $1,074M Liabilities)
  2. FraxBP // All of Frax Liquidity (FraxBP, FraxPP, Frax3CRV) is 3.0x of 3Pool
  3. FraxLend // ATH TVL at $242M

Frax Supply & Peg

We have supply remaining flat, the peg range is tight, and the Curve swap exchange rate is at $0.9982.  Let’s keep this rate above $0.9980.

Big news this past week as Frax Finance dropped the long-awaited Balance Sheet for the FRAX stablecoin.  This was a treasure trove of data points.  Let’s walk through it.  We have Owned FRAX-USD, these are all the FRAX and the Stablecoin pairs.  Owned FRAX are FRAX straight up just on the balance sheet.  Owned Volatile are the volatile assets like vlCVX.  Owned FRAX-FXS are FRAX in the FRAX-FXS pair.  Owned FRAX-Volatile are all the FRAX and the corresponding non-stable pairs.  Owned USD are all non-FRAX stablecoins.  Owned FXS-Volatile is just WETH paired against FXS.

Aside from that, not much to report here so let’s move on to the Collateralization and Decentralization Percent.

Collateralization & Decentralization Ratios

Flat across the board for the past 8 Frax Checks.  But, we want to highlight that you’re able to calculate the Collateral Ratio of FRAX by utilizing information on the balance sheet.  If we take the Total Assets minus Locked Liquidity, then divide by Total Liability, we receive the Collateral Ratio.  Moving on.


Nothing much to report here out of the usual.  FraxBP gained 60 bps and is currently at $623M.  However, the volume for July so far has been abysmal — literally less than 1% of the TVL is being used.  Frax liquidity pools are now nearly 3.0x that of 3POOL.  We are in a new regime in the Frax-Curve flywheel relationship.

IQ Staking

Did you know that BrainDAO was founded by Sam K before he founded Frax Finance? That’s right! BrainDAO’s flagship product is their IQ.wiki, which is the crypto encyclopedia. We have nearly all of our Flywheel guests wiki page on there so be sure to check that out!

Additionally, you can stake IQ today to earn a whopping 110%. There are 1820 holders of IQ on Ethereum but only 184 are staked. There’s definite value in staking as the treasury is $16.3M. There needs more governance power to secure and direct the treasury.

Be sure to go to the staking page today here.

FrxETH supply and distribution

Now onto the crowd favorite, le frxETH. We rocking strong here with 236,091 frxETH supply, an 1.8% increase from last 2 weeks — frankly one of the lowest growth rate we’ve seen.

FrxETH peg

Reminder, frxETH is still a stablecoin, just a stablecoin pegged to ETH instead of the dollar. So we must check the peg. Here the dashboard shows 0.9991, a fairly strong rate, but we can’t just rely on dashboards. In the markets, we swapped 3.5k frxETH for ETH via Curve and received an exchange rate of 0.9989, which is also a very strong exchange rate. Arguably, one of the best rates in the LSD landscape.

Competitive landscape

Speaking of landscape, let’s look at the LSD market.

We are DOWN!

We were at 2.33% at the end of June but now we’re at 2.30%. We saw strong growth in May but pretty much down all of June and starting July quite slow. But at least we’re top-of-the-charts in the yield department.  There’s also another chart on Frax Facts that we should check out.  This chart tracks earnings for 1000 ETH staked across the top four LSD providers.  Evidently, sfrxETH kicks butt.  The actual APY is at 6.71% versus the closest competitor of stETH at barely 5.01% — sfrxETH is higher by more than 50%.


The FPI has remained quiet for some time now since the release of veFPIS. We saw a flat week this week so nothing to report.


FraxLend had an amazing 2 weeks.  The collateral value and the borrowed amount are back up to levels before the USDC crisis.  The Utilization rate is also climbing back to the low 70s.  We want to be in the mid-80s here.


Lastly, we have the final leg of the DeFi Trinity with FraxSwap. We like to call this the Dex that no one talks or knows about but it’s pushing out major volume relative to its size. There are only $70M TVL across all the pools.  Though this has been one of the slower weeks since our usual FXS/FRAX pair normally facilitates $15M in volume but, this week we only processed $10M.  Regardless, we are putting great numbers with 26% of the TVL used to facilitate $18M+ of volume.


Revenue, Expenses, Profit

Show me the money! Well, here it is.

For June, we had a great run.  Our Convex AMO were at a negative but FraxLend Liquidations offset that loss and some.  We ended JUne with $341k in profits.

Two weeks into July and we’re at $120k loss across all the business units.  We’re down bigly on the Convex AMO with over $400k in the red.  On the FraxLend front, even though we didn’t increase the AMO, we generated $23k in revenue each week.  No Liquidations.

Following we have the frxETH revenue which we calculated by taking the quantity of frxETH multiplying it by 7% for the staking yield then multiplying again by 8% to get Frax’s fee share then a final multiplication with the price of ETH and finally dividing that by 12 to get the monthly figure, which is $204k — awesome. Lastly, we have the FPI which generated $42k in profit, that is after the requirement for the peg.

That is it for this week’s Frax Check #47! We hope you guys enjoyed this one and see you next week!


Not financial or tax advice. This article is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This post is not tax advice. Talk to your accountant. Do your own research.

More from Flywheel

View More

Subscribe and join the Flywheel family

Always Free. Never Spam.

Harness the power of the flywheel.

Not financial advice. Flywheel content is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions.

Flywheel and affiliates are not liable for any investment losses or damages resulting from your reliance on any information provided.

2023 ©️ Flywheelpod Inc. All rights reserved.