Thread by @CryptoGrills

Let me provide a guide on $frxETH staking and explain why it's going to be the most attractive liquid staking derivative around.

@fraxfinance recently opened up the minting of $frxETH here: app.frax.finance/frxeth/mint

This allows you to stake your $ETH into a Validator ran by Frax.

Once you've minted your $frxETH you can stake it and receive #sfrxETH.

sfrxETH represents the staked frxETH + yield accrued. This means that over time, the underlying value of sfrxETH keeps increasing.

To put this into an example:

If APR were to be a consistent 8%, then after staking 1 sfrxeth for 1 full year, you'd be able to swap back your 1 sfrxETH for 1.08 $frxETH.

What will the APR be in practice? We don't know yet. What we do know however, is that it's going to be higher than what any other player offers.

Let me explain why.

Currently you have players like @LidoFinance with their LSD $stETH, offering 5.4% APR.

This APR comes from $ETH Proof of Stake emissions + EL rewards.

How is Frax going to top this? Well, the team has come up with a killer design:

They're going to take advantage of their leading position in the #Curvewars.

As you probably know by now, @fraxfinance is the single largest DAO $CVX holder. They're also the king of bribes.

Frax has managed to get a @CurveFinance gauge approved for $frxETH - $ETH.

This means that @fraxfinance can now use their $CVX to direct $CRV emissions towards the pair.
They can also use bribes to enhance this.

But that's not all of it. @fraxfinance is going to boost the yield on this pair even more by deploying an $FXS gauge for the pair.
snapshot.org/#/frax.eth/pro…

This means that LP's for the $frxETH - $ETH pair will earn $CRV, $CVX AND $FXS. 😲

How will this impact sfrxETH APR?

Well think about this: when people mint $frxETH, the underlying $ETH gets used by frax to run validators and earn #ETH PoS emissions.

What happens when 50% of these minters decide to LP their $frxETH in the #Curve frxETH-ETH pool?

That would mean that they forfeit their $ETH staking rewards in order to earn $CRV, $CVX and $FXS instead.

What happens to the forfeited $ETH PoS rewards then?

You guessed it right, these rewards go towards the #sfrxETH stakers. Resulting in a MUCH higher APR than competitors.

All of this is very bullish for the governance token $FXS.

You see, like every other $ETH LSD provider, Frax will take a protocol fee.

Frax is taking the same approach as Lido (10% fee). 80% of the fees earned from this will be used to buyback $FXS from the open market. 🌚

All of this is about to kick off in the next few days.

@CurveFinance $CRV $CVX bribe round is happening as we speak.
votium.app

@fraxfinance $FXS Gauge voting happens on Wednesdays.
app.frax.finance/gauge

Expect the flywheel to start spinning into hyperspeed. 🌀

If you'd like to learn more about the @fraxfinance protocol as a whole I'd suggest checking in on @flywheelpod. They've been doing amazing work in educating people about $FRAX, $FXS and deserve some more recognition imo.

Hope you enjoyed the read. #Threadoor out.