Summary:
Proposal to add the FRAX/TEMPLE xLP/LP factory pool from Stax Finance to the Gauge controller to enable users to assign a gauge weight and mint CRV.
References/Useful links:
Website and Documentation: https://www.stax.fi/
Curve Pool: https://curve.fi/factory/127
Protocol Description:
Stax Finance is a protocol incubated by TempleDAO to create a liquid wrapper for locked assets. Stax’s first product is xLP, a wrapper for FRAX/TEMPLE Uni v2 LP token that has its own gauge on Frax Finance. FRAX/TEMPLE LP providers receive boosted yields when they lock for a longer duration on Frax. When they deposit their LP tokens on Stax, the LP token will be converted to a wrapped receipt token called xLP at 1:1.
In exchange, Stax will lock up to 90% of the LP tokens for up to 1.5 years on the Frax gauge and reserve 10% to add liquidity on Curve via the xLP/LP pool. The xLP holders can stake their new tokens in the Stax reward vault to benefit from the lockup-boosted FXS yields. They also retain their liquidity and can exit the farm whenever they wish by unstaking xLP and swapping the xLP back to the original FRAX/TEMPLE LP token on Curve.
Motivation:
To facilitate redemption for xLP holders to exit their position, they need a way to swap the xLP token for the FRAX/TEMPLE LP token. We’ve chosen Curve’s stableswaps due to the capital efficiency and reduced slippage that they offer to this type of exchange.
A Curve gauge for the xLP/LP pool will allow liquidity in the pool to be incentivized, which will attract more xLP/LP liquidity and help to maintain the pool’s peg more tightly.
If this gauge proposal passes, Stax Finance plans to incentivize veCRV holders to vote for this gauge through the use of bribes.
Specification:
1. Governance:
To date there is no separate governance for Stax Finance. The xLP liquidity manager contract is deployed under the Stax Finance Multisig Gnosis Safe operated by TempleDAO Team members (0x8c2D06e11ca4414e00CdEa8f28633A2edAf79499)
2. Oracles:
No oracles are currently used as xLP and LP tokens are expected to trade close to 1:1.
3. Centralization Vectors
Stax Finance contracts are controlled by Stax Finance’s multisig gnosis safe.
4. Market History
Curve Factory Pool 127 for Stax Frax/Temple xLP/LP was launched on June 3, 2022 with a TVL of ~$19M. To date, the pair has maintained peg. TempleDAO owns 96% of the pool.