"Could this be the turning point?" - FraxCheck #56

Nov 14, 2023
"Could this be the turning point?" - FraxCheck #56

This week... I call this week the “Could this be the turning point?” week. As the name suggests, this could be the moment when things turn for the better.


  1. FRAX // 93.9% Collateral Ratio
  2. FraxLend // AMO Generating $2M Ann. Run Rate
  3. frxETH // $600M TVL

Frax Supply & Peg

FRAX supply holding steady at $672M for the past 2 months. Though this is still -35% YTD since we started the year at 1B in supply. Nothing else to report here, moving on the peg.

We saw the peg got as high as 1.000 and as low as 0.999. In the market, we saw an exchange rate of $0.994 when swapping up to 85M of FRAX for USDC.

Small bump on the assets side of the balance sheet, plus $6.0M, for this Frax Check. Our Liabilities decreased by $0.4M, so our balance equity had a nice bump up to $6.7M. We currently have $819M in Total Assets, $742M in Liabilities, and $77M in Balance Equity.

Collateralization Ratios

The Collateralization Percentage bumped by 130 basis points up to 93.9%. We got this number by taking the Total Assets ($819M) subtracting the Locked Liquidity ($122M) then dividing that by the Total Frax Supply (742M).


Plus 8%! FraxBP's TVL is somewhat balanced – 66% FRAX and 34% USDC.

When we add up all the FraxBP, Frax3CRV, and FraxPP, we receive a total of $197M, which is 1.07x of the 3Pool. We're finally above 1.00x again!


sFRAX been live for seven weeks and we've amassed $34.3M. Though this is a big drop from $44M 2 weeks ago. Come get real-world yields via sFRAX now. The APY at the time of writing is 5.4%. There are 186 sFRAX holders, which is a drop of 1.5% from 2 weeks ago and what's good to see is that practically every sFRAX holder bought FRAX to stake it into sFRAX!

FrxETH supply and distribution

Now onto the crowd favorite, le frxETH. We rocking strong here with 291,735 frxETH supply, a 3.6% increase from the last Frax Check. sfrxETH got a small bump to 75%. Total frxETH liquidity on curve hit $156M across 3 pools. The blended balance across these pools is 71% frxETH and 29% ETH, wETH, and stETH.

frxETH's monetary premium is at 6%! This means that 6% of the supply of frxETH holders are happily holding or utilizing frxETH outside of the Frax native ecosystem.

FrxETH peg

Reminder, frxETH is still a stablecoin, just a stablecoin pegged to ETH instead of the dollar. In the markets, we swapped 3.5k frxETH for ETH via Curve and received an exchange rate of 0.997. The exchange rate drastically improved from last Frax Check, which was 0.977.

Competitive landscape

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

We held onto 2.5% of the market. For the last 30 days, we've grown 6.4% but our competitors such as rETH and stETH, grew by 3.8% and 1.6%, respectively.

In the yield department, frxETH leads the pack with 4.15%. The competitors are closely behind though so there is no resting!


The final stablecoin: FPI. The Annual Inflation Index also is at 3.7%. Good thing that the FPI is still above Peg by 40 basis points. The treasury consists of $92.8M with an excess equity of $4.0M.


FraxLend's stable. We've found a good level at around 250M-ish TVL with $63M borrowed. A 79% utilization rate is healthy. I like to see utilization in this range.


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. There are only $64.8M TVL across all the pools. We saw massive volume in the FXS/FRAX pair these past 2 weeks with an avg 7D volume of $25M, we were in the $3-5M range but it has been picking up. For October, this DEX turned over 73% of its TVL.


Revenue, Expenses, Profit

Show me the money! Well, here it is.

Let's look at the FraxLend AMO as that's one of the key revenue drivers with $84k so far in November. FRAX Lent decreased to $58.9M from the $62.5-$65M range that we were in for quite some time.

Another revenue stream from FraxLend is liquidation fees. For November we did not have any liquidations. Good work everyone for staying safe.

FPI basically broke even for October but is off to a great start in November with $31k in profit. But if we zoom out, we see that over the months we've been slowly bleeding. Fortunately, we have a $3.6M buffer to draw down upon.

Lastly, if we do some rough math we could estimate the run rate of frxETH at $1.6M for the year. The math goes as such: 27.2 frxETH rewards per day* 365 days * 8.0% fee rate * Price of ETH. Then divide that by 12 to get the monthly figure of $135k per month or 66 ETH.


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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