This proposal is to whitelist the Frax Curve AMO contract in Curve’s “SmartWalletWhitelist” contract allowing Frax’s Curve AMO to participate in Curve governance, lock CRV and provide a boost on the Frax Curve AMO contract. The Frax Curve AMO will always lock any earned CRV for 4 years and continuously re-lock for the maximum amount of time. The contract will not sell any CRV earned and will continuously lock CRV for the maximum amount of time.
More information on Frax and the Frax Curve AMO can be found here.
• The Frax Curve AMO uses protocol-controlled assets to provide liquidity to the Curve Frax-3pool.
• Whitelisting the Frax Curve AMO will allow the Frax community to participate in Curve governance and act as a token sink for any CRV the AMO earns. The FRAX community plans to begin by purchasing $1mm of CRV and locking it for 4 years in the contract.
• All CRV earned by the AMO will be locked for the maximum amount of time and be relocked continuously. No CRV will be sold.
The Curve Frax-3pool and Frax Curve AMO have become core components within the Frax protocol. Both were significant factors in Frax’s performance through the recent market contraction. Whitelisting the AMO contract will allow Frax to lock CRV, attract additional liquidity to the pool, and participate in Curve governance. Whitelisting will also allow Frax to lock all existing CRV in its treasury. For CRV holders, whitelisting the Frax Curve AMO will create another CRV sink, with all CRV earned being permanently locked by the AMO contract. It should drive additional volume and fees to CRV holders and decentralize Curve DAO governance in the long term.
The Frax community is currently advancing a proposal to use $1mm of protocol controlled funds to purchase CRV on the open market and then lock it for veCRV for 4 years. The whitelisting is necessary for Frax to lock the CRV using the Frax Curve AMO contract.
Whitelisting the Frax Curve AMO will also be symbiotic with Yearn and benefit the broader Curve community. Frax is currently one of the largest users of crvFRAX and will not curtail any deposits or usage of Yearn if whitelisted. Directing a portion of future demand into the whitelisted contract will benefit both Frax and Yearn by increasing their respective boosts. If Yearn is the single largest LP by a wide margin, the Yearn boost is penalized due to the Curve pool boost calculations. Creating an additional whitelisted contract in the pool will lead to a higher boost for the contracts and provide the Curve community with a greater degree of decentralization.
The Curve DAO needs to execute the following function on SmartWalletWhitelist to approve the FRAX Curve AMO contract:
• Frax recently completed an audit with Trail of Bits. There were no critical findings. The final report is forthcoming. Frax previously completed an audit with Certik.
This proposal will likely create additional volume, TVL and fees for Curve and veCRV. It will also create a CRV sink for all CRV earned by the Frax Curve AMO. Over time, it could contribute to the decentralization of veCRV and expands collaboration between the Curve and Frax communities.
Whitelisting the Frax Curve AMO will likely lead to additional liquidity in the Frax-3pool.
This will be updated with the poll link once the vote is live.