Frax Finance

11 Dec 2024 23:10

Personally thought the most important parts today were: custodians + relationship between fraxUSD, sFrax and fraxBonds. This allows on/off ramp into frax yield products directly (cuts out other stables) and will significantly expand TAM

Frax Finance

11 Dec 2024 23:03

Keep in mind that in most countries there is no difference between an FXB and PEPE. The tax man and the local sec will treat them the same.

Frax Finance

11 Dec 2024 23:00

Like you said, this does make FXB markets more liquid and tbill-like, Frax is the only ecosystem that has the full yield curve onchain like this. You won't need to leave Frax nation unless you voluntarily decide to (which you can always do ofc). The full yield curve, best stablecoin yields, a high-performance sovereign rollup chain, and a diverse ecosystem+community. It's the full stack of crypto. 😎️️

Frax Finance

11 Dec 2024 22:58

Even when the FXBs reach maturity, they convert to Frax USD and the Frax USD backing remains on the Frax balance sheet unless people redeem.

Frax Finance

11 Dec 2024 22:57

It also forces Vefrax holders to hold onto their rewards unless they want a pay cut and relies on a secondary market for frax bonds… if lots of people sell their rewards the rewards will start to be worth less unless you hold to maturity

Frax Finance

11 Dec 2024 22:55

It will increase in size until bonds start reaching maturity

Frax Finance

11 Dec 2024 22:55

This creates a flywheel feedback loop of the Frax reserve continually increasing in size rather than emptying out and distributed as 'dividends.'

Frax Finance

11 Dec 2024 22:53

There’s lots of things in the world that have to buy bonds and can’t buy crypto assets

Frax Finance

11 Dec 2024 22:32

That will be described in more detail in the gov vote, new FRAX formerly known as FXS docs, and also the next roadmap announcement part 2 coming very soon. Keep in mind today is part 1 of 3. Still have chain, AI, and other surprises to reveal. Part 1 mainly sets the stage so the other ones can be revealed.

Frax Finance

11 Dec 2024 22:30

congrats on announcement!

Frax Finance

11 Dec 2024 22:28

there is only one direction for fiat currencies vs commodities

Frax Finance

11 Dec 2024 22:25

I am a happy bond holder as well by the way. Learned about bonds bc of Frax Finance.

Frax Finance

11 Dec 2024 22:23

What guided the choice to go for redeemability?

Frax being something that was issued and not redeemable was such a massive differentiator for the ecosystem. Just curious for some of the reasoning as CR was already ~ 100.

Frax Finance

11 Dec 2024 22:18

Why would they ever have to be redeemed though? Wont they just always mature?

Or is this in the case frxUSD holders want back USD?

Frax Finance

11 Dec 2024 22:15

By then, FraxBonds will have time tested historical value.

I see FraxBonds, like many products as in..there will be early adopters. As people gain more trust in the value prop, it will grow. I feel like it may grow slow, slow and then all of a sudden.

We will see.

Frax Finance

11 Dec 2024 23:04

Hello ser. I have some new information to you. You can see on the Frax Facts page linked underneath if we have assets in FinResPBC. It should be searchable when we do. At the moment we do not have any assets on our balance sheet with them.

As for transparency of assets with FinResPBC, you have to go through their website or find other public information on their assets. The team has their processes and due diligence in place, but it is not public at the moment. Hope that satisfies your question.

https://facts.frax.finance/frax/balance-sheet

Frax Finance

11 Dec 2024 23:00

Lock in protocol profits, go long ETH and BTC. Who wants out can cash out their bond in a Curve pool. Sound amazing

Frax Finance

11 Dec 2024 22:58

By that point maybe there will be no reason to redeem, just spend frax usd

Frax Finance

11 Dec 2024 22:58

As a benefit it will make the bond markets more liquid

Frax Finance

11 Dec 2024 22:56

Yes, I have been pushing for redistribution of protocol profits in the form of stables. This way sounds much more profitable for everyone involved

Frax Finance

11 Dec 2024 22:55

And it also keeps the APY of veFRAX (currently called veFXS) high and proportional to revenue.

Frax Finance

11 Dec 2024 22:54

I think you're misunderstanding which is why I said the pod was more conceptual than what is being proposed in governance. The FXBs are distributed as revenue/fee switch, not being sold. This was actually part of a gov vote by Convex a few months back. For example, if Frax earns $10m of revenue in a month, then instead of emptying out the balance sheet/reserve of the protocol to pay 'dividends,' the protocol mints $10m of long dated FXBs and distributes that to veFRAX stakers (currently called veFXS). It gets to keep the $10m of revenue in its reserve. That $10m of revenue can be converted to tbills to back the FXBs.

Frax Finance

11 Dec 2024 22:50

This makes way more sense, I am sorry for going on a tangent. One question still floats in my mostly empty head. Why would anyone buy these "strategic reserve bonds" instead of buying the actual underlying asset ?

Frax Finance

11 Dec 2024 22:30

You’ll notice the theme of the new vision roadmap is about onboarding the next 1 billion users that are coming to crypto over the next 5 years. Every design decision from the chain roadmap, AI, and also Frax USD is guided by that North Star. In order to make Frax USD actually integrated at large scale, it needs to be at least partially mint/redeemable for fiat/cash and always completely collateralized by safe assets. Otherwise fintechs like Stripe, banks, CEXes etc won’t integrate it over fiatcoins. They need $1.00 perfect parity and rails. Frax USD’s design accomplishes that as well as the onchain DeFi yields/AMOs. The best of both worlds. It’s very similar to how Ethena is mint/redeemable by its partner custodians like Copper etc. that’s why it’s been able to get on CEXes. Notice how no fully onchain stable has ever made true inroads in that area. The future is the hybrid design of Frax USD and Ethena.

Frax Finance

11 Dec 2024 22:28

Great to hear, Sam. Excited for the formal vote proposal.

How will you fork the existing veFXS into FRAX if it is locked?

Frax Finance

11 Dec 2024 22:27

I view the announcements as long term bullish and bullish leading into Feb when the bulk of it launches

Frax Finance

11 Dec 2024 22:24

Where do you borrow? Fraxlend?

Frax Finance

11 Dec 2024 22:18

Did we get an update on fractal points

Frax Finance

11 Dec 2024 22:16

I’m a happy frax bond holder… but only because it gives me lots of fxtl and I can borrow stables against it.

Frax Finance

11 Dec 2024 22:11

I’m willing to accept there could be large demand for frax bonds within a few years as defi matures