CIP#56 - Add gauges for LUSD and FRAX Metapools

Proposals
#1

Summary:

We are proposing to introduce gauges for the following pool:
FRAX Metapool
LUSD Metapool

If the vote is successful, those gauges will be eligible to be voted for on gauge weight vote and receive CRV from next Thursday midnight UTC.

FRAX

Frax finance is a fractional-algorithmic stablecoin protocol. FRAX price performance from the inception has proved its stability to stick to the peg in comparison to other stablecoins. Frax has already gone through the expansion and contraction period with the respective swings in the ROI of the incentivized distribution programs (“yield farming”). However, it successfully resisted to the exiting supply pressure even having the Uniswap as the main trading venue. It was due to the sufficient share of users having locked their LP tokens for long-term period and contribute to the protocol on the daily basis.

LUSD

LUSD is a fully decentralized stablecoin backed by ETH as collateral. It is generated when users open a Trove in the Liquity system and borrow against their ETH (akin to MakerDAO). All Troves must maintain a minimum collateral ratio of 110%, ensuring that LUSD is sufficiently backed by collateral.

Specs:

FRAX
Website - https://frax.finance/
Github - https://github.com/FraxFinance/frax-solidity
Contract address - 0x853d955acef822db058eb8505911ed77f175b99e
Audits - https://www.certik.org/projects/fraxfinance

LUSD
Website - https://www.liquity.org/
Github - https://github.com/liquity/liquity
Contract address - 0x5f98805A4E8be255a32880FDeC7F6728C6568bA0
Audits - https://docs.liquity.org/documentation/resources

Poll:

Vote here (30% quorum required): https://dao.curve.fi/vote/ownership/43

7 Likes
#2

To clarify, despite Frax’s marketing, Frax does not quality as an “algorithmic stablecoin”. It is a crypto-stable backed 100% by cryptocurrency; on 1:1 basis in USD-value. This excludes it from classification as an algorithmic stablecoin which uses algorithmic mechanisms exclusively to stabilize the coin at peg. In every case, FRAX requires exactly $1 of crypto to mint (a combination of USDC and FXS) and redeeming it retrieves exactly $1 of crypto.

It is also not fractional in any meaningful economic sense- as I described it is fully backed by collateral. Fractional implies under-collateralization, which is not.

Frax markets itself as a project which has somehow solved the highly-challenging financial problem of stabilization through algorithms; it has done no such thing and is traveling down a well-worn path of dozens of other crypto-stables.

Thought I would add that clarification.