Summary:
Authorize gauge proposals for inaugural frxETH pairs that are part of Frax Finance’s WETHR program.
1st cohort of frxETH WETHR pools
frxETHstETH (stableswap)
frxETHrETH (v2)
frxETHsETH
frxETHalETH
frxETHcbETH
frxETHCRV
frxETHCVX
These pools will get FXS bribes through Votium proportional to their TVL using a similar algorithm to the FRAXBP system.
Motivation:
Frax has been the largest Curve/Convex/Votium briber for over a year. frxETH is Frax Finance’s new stablecoin and we wish to begin a similar incentives structure to the widely successful FRAXBP system but with our ETH pegged stablecoin. This system will be positive sum with all other LSDs as we will commit to growing liquidity for all projects that pair with frxETH proportional to pool TVLs. Other than evaluating projects for security risk, this program will be open to all LSDs with future gauge proposals and pools deployed as the WETHR program grows.
Specifications:
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Governance:
Frax Protocol conducts regular Snapshot governance for all protocol parameter changes and integrations using a veFXS voting system identical to veCRV mechanics. Frax governance is also supported by Convex allowing vlCVX holders to participate by proxy. Snapshot domain here: Snapshot
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Oracles:
FRAX’s stablecoin peg does not rely on offchain oracles at this time and actually relies on the Curve AMO keeping FRAX3CRV and FRAXBP pools balanced at $1.00 peg price using protocol controlled liquidity. Fraxlend, Frax’s internal lending market, uses Chainlink oracles and TWAP oracles for certain collateral prices.
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Audits:
Frax Protocol has been audited many times and has recurring quarterly audits done which are published regularly here: Audits - Frax Finance ¤
To date, Frax Protocol has had 0 critical incidents and 0 instances of user loss of funds due to exploits or hacks.
- Centralization vectors:
While Frax Protocol’s governance and msig structure have been widely documented, including in a Llamarisk analysis, the other tokens in the frxETH pools above have their own risks and should be evaluated on their own merits. All other tokens in this 1st cohort of WETHR gauges are well-known projects with a good history both on Curve and in DeFi so it should be relatively low risk. However, the community should evaluate each proposed Curve pool as well.
- Market History:
FRAX is one of the best performing stablecoins since inception. frxETH (the stablecoin for this gauge proposal) has never depegged and is the best performing ETH stablecoin/LSD on the market. frxETH currently exhibits the best ETH peg out of all LSDs.
Thank you to the Curve community as always for you consideration and continued support of Frax Finance.