Frax Finance

11 Dec 2024 22:08

The way frax bonds work, there is also no distributed yield until maturity, which makes them significantly worse for some types of holders.

Frax Finance

11 Dec 2024 22:05

Yeah he’s talking about 10-30 year bonds. Which is a no brainer bet… my question is who wants to buy those bonds… clearly there are large institutional buyers of long duration bonds but are they willing to buy a frax bond? Defi degens mostly prefer exposure to crypto or liquid stables

Frax Finance

11 Dec 2024 22:02

My thought is, Full stable collateral for the frxUSD but using the exogenerous collateral like CSR to mint frxUSD against with AMO but only use them to provide liquidity in bluechip DeFi and liquid, such as if asset price decrease you just burn them? maybe I’m tripping idk

Frax Finance

11 Dec 2024 21:41

I might have misheard then.

Frax Finance

11 Dec 2024 21:38

Inflation will take care of that part

Frax Finance

11 Dec 2024 21:31

I don't disagree with the decision. As you said, didn't have much of a choice.

Frax Finance

11 Dec 2024 21:27

We had the SEC on the hunt for blood. There was no other way for us

Frax Finance

11 Dec 2024 21:25

It doesn’t even matter is it’s a “good” investment, it increases volatility on an asset that should pride itself on having no volatility

Frax Finance

11 Dec 2024 21:24

Betting on Bitcoin is like betting on Geocities (or AOL) in 1999. Also, the CR<100 absolutely hampered FRAX adoption. If we fund the strategic reserve with frxUSD assets, we’re taking on risks that’s are absolutely unnecessary and don’t improve the core business

Frax Finance

11 Dec 2024 21:22

but that has happened before with price of eth going down etc

Frax Finance

11 Dec 2024 21:21

Then this is much worse, draining the backing of our stablecoin to plug holes made by the strategic reserve.

Frax Finance

11 Dec 2024 21:19

CR and strategic reserve assets will be highly correlated. Be assured that if ETH and BTC dip, the rest will dip(hence CR). CR looks like it will be a thing of the past though, as frxUSD will be redeemable by CEX

Frax Finance

11 Dec 2024 21:18

so essentially what will happen is like when eth went down this summer, that vefxs wont get profit for some time, instead we will see alot of buying of frax etc to increase the treasury

Frax Finance

11 Dec 2024 21:15

And it's a strategic reserve, not the entire Frax treasury.

Frax Finance

11 Dec 2024 21:13

Would love to get @StableScarab pov on this

Frax Finance

11 Dec 2024 22:06

You should remove both jobs from the careers page because the applications are closed

Frax Finance

11 Dec 2024 22:04

Perfect, glad to hear it! Very excited for the governance votes

Frax Finance

11 Dec 2024 22:02

Just want to remind everyone, the veFRAX (currently called veFXS) reward system launch will be in a governance vote and so will the Crypto Strategic Reserve. Please wait until the formal vote to see how it will function. I think people are possibly misunderstanding a bit from just the announcement thread and some tangential discussion on the Flywheel pod.

The Crypto Strategic Reserve is the excess value held by Frax like a giant pot of ETH, BTC, CVX, and strategic volatiles. It is very bullish for Frax. And Frax USD will be always fully backed by stablecoins/cash/tbills, not volatiles. You can think of it like a new stablecoin with top yield+redeemability functionality through strategic partners/custodians 💪

Frax Finance

11 Dec 2024 21:40

my POV is that in the long run, establishing a CSR and investing in BTC and ETH is super bullish

I think we will debate from where we want to fill the CSR, and it’s a reflection of our own risk tolerance

we survived a long winter to get to 100CR, I believe the protocol will take measures to lock that in

so it’s more about backing for FXBs

Frax Finance

11 Dec 2024 21:38

He said if it doesn't double in 30 years just past hour mark

Frax Finance

11 Dec 2024 21:28

Agree to disagree then

Frax Finance

11 Dec 2024 21:26

I think turning off veFXS rewards hampered adoption more than <100 CR.

I think long term CR is 100% stables + X% volatile assets (BTC, eth, crv, CVX)

Frax Finance

11 Dec 2024 21:25

Mate you know I have always greatly valued your opinion, this time I have to push back

Frax Finance

11 Dec 2024 21:22

It's not really draining. Frax was minted/distributed that doesn't have collateral backing it, negatively impacting CR. The risk seems small to me though. Going below 100% CR isn't the end of the world, and it feels unlikely BTC and ETH prices don't keep up with FXB interest.

Frax Finance

11 Dec 2024 21:21

Sometimes you need to take risks

Frax Finance

11 Dec 2024 21:20

(speculation from my side) is we will move to have the 100% covered by less voaltile assets. and above willbe in things like eth and btc

Frax Finance

11 Dec 2024 21:18

until cr is back to 100%

Frax Finance

11 Dec 2024 21:16

why would they need to be redeemed at a loss?
what it will hit CR if treasury cant grow faster than the value they get from issuing the bonds, but not beating 4% sounds like an over all L imho
but beside that if it DOES happen, then we have seen CR can be below 100% and have no problems for the frax price

Frax Finance

11 Dec 2024 21:14

I think it would negatively impact the CR since Frax would have to draw from the treasury to covering the maturing FXBs (maybe not that exact process, but effectively).

I think these would be long dated bonds though, so the risk seems relatively small to me. I feel pretty comfortable that (for example) eth and BTC will grow faster than 2-6%/yr

Frax Finance

11 Dec 2024 21:11

Yeah, not a big fan of exposing ourselves to unnecessary risks. I’m happy to go along with throwing a chunk of profits into a strategic reserve but I think frxUSD balance sheet assets should not be commingled with other FRAX assets.