"Truth Hurts" - FraxCheck #48

This week... I call this week the “Truth Hurts” week. As the name suggests, this week we're going straight to the truth and it hurts, badly.

July 25, 2023


  1. FRAX // 9% decrease down to $913M
  2. FraxBP // Exchange rate 0.9965
  3. frxETH // new ATH at 241,830

Frax Supply & Peg

We’re not going to sugarcoat it.  The $FRAX stablecoin supply dropped by 9% down to 912.6M.  But this is also part of Frax’s mechanism to protect the peg.  

A stablecoin needs to be able to scale up as well as scale down — reacting dynamically to market conditions and actions.  This decrease in the $FRAX supply came out of the Curve AMO.  As expected the exchange rate for FraxBP took a hit.


This Curve pool experienced a 21.2% drop in TVL, from 623M down to 491M since the last Frax Check.  Ouch.  Though the volume that the pool facilitated was $41M for July, which is an 8.3% utilization rate.  The key issue though is that the exchange rate is now 0.9965.  As we’ve said numerous times, we don’t want to see anything below 0.9970 as we’re now paying non-stable swap fees to swap stable assets.

Another area is that the pool is still at a 72/28 balance.  We want to see this brought down to the mid 60s.  Thankfully we have a new round of Votium bribes closing soon so perhaps the Frax team would juice the incentives a bit more for FraxBP for the next 2 epochs so we can rebalance the pool.

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 109%. There are 1848 holders of IQ on Ethereum but only 184 are staked. There’s definite value in staking as the treasury is $16.9M. 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

We are SO back.  Not all things are red.  We see a new ATH for the crowd favorite frxETH.  There’s 241,830 frxETH supply.  Finally resuming our up only action.

Two-thirds of all frxETH is staked in the sfrxETH vault earning that sweet-sweet native yield.  Nearly a quarter is in the Curve pool faciliating the swaps between frxETH and ETH.  Lastly there’s 11% of frxETH just chilling in the ether.

Though there are some bad news as for the last 30 days, we really haven’t grown much in terms of market share.  We’re still at 2.3%.  This is relatively bad when you see Rocketpool growing faster than we are and worse is that Lido is growing faster than we are.  Queue frxETH v2.  SoonTM.


Revenue, Expenses, Profit

Show me the money! Well, here it is.

Spicy spicy spicy month so far.  For the Convex AMO we are currently down $862k.  That is not a typo.  Though we suspect the team has yet to hit the “claim” button on some rewards so the dune isn’t populating correctly yet.  So we will check back in on this one.

Next up we have our Fraxlend which is pulling in nearly $100k for the month of July.  And this is real yield, no token emissions at all.  If you include the liquidations then we crossed the $100k threshold.  This isn’t the highest ever, however, last month’s $250k liquidations really put us over the top with Fraxlend.  Nuts.  Stay safe out there y’all.

Following we have the frxETH revenue which we calculated by taking the quantity of frxETH multiplying it by 6.5% 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 $193k — awesome. Lastly, we have the FPI which generated $53.3k in profit, that is after the requirement for the peg.

That is it for this week’s Frax Check #48! We hope you guys enjoyed this one and see you next week to welcome in the month of July!


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.

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