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StableScarab🪲(¤,¤) Profile picture
@StableScarab
Jun 21 • 9 tweets • 4 min read Twitter logo Read on Twitter
1/ Last week, @samkazemian revealed details on @fraxfinance's new L2 Fraxchain.

Frax has already launched several innovative stablecoins and an ecosystem of supporting products. Fraxchain can take the protocol's value to new heights.

Here's everything we know so far🧵👇
#crypto Image
2/ What is Fraxchain?

Fraxchain will be a hybrid rollup with gas denominated in $ETH or for Frax, their ETH stablecoin $frxETH. This means that as people use Fraxchain the amount of frxETH used up for gas will increase. That frxETH can be burned OR distributed to veFXS holders.
3/ You can expect Frax to also include the latest innovations.

One thing Frax is considering is starting the rollup from day one with every wallet having account abstraction. This allows for more security and a better UX for all.
ethereum.org/en/roadmap/acc…
4/ Why Fraxchain?

Frax has built an entire ecosystem of products around their stablecoins. Bringing them all together on their own L2 allows them to create an entire financial world that benefits users. Swap, lend, bridge, stake, etc natively for a fraction of the cost.
5/ Haters gonna hate.

After Fraxchain was announced, some skeptics claimed that Frax is just forking trends. In reality, every Frax product fulfills the singular purpose of supporting their stablecoins and increasing their monetary premium.

6/ What does this mean for Frax Shares $FXS?

While the past few months have been challenging for FXS, Frax has made a lot of progress in their ecosystem. If they can continue to deliver on frxETH v2, Fraxchain, and more, the upside is tremendous.
7/ When Fraxchain?

Fraxchain won't be ready for another 6 months, but there will be plenty to look forward to in the meantime: the game-changing update of frxETH v2, the march to 100% FRAX collateral ratio, and full decentralization of Frax governance.
8/ Fraxchain news broke on the @FlywheelDeFi podcast with @DeFiDave22 & @0x_capitalk produced by @traders_insight. I highly recommend the full episode which starts out with $frxETH v2 alpha (thread coming soon) before the Fraxchain alpha drops at min 45.
9/ That's the thread! If you learned something give the first tweet a like/retweet and follow for more Frax, DeFi, and crypto analysis.

Have a question about Frax? Leave a comment and I'll answer.

• • •

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More from @StableScarab

StableScarab🪲(¤,¤) Profile picture
Jun 8
1/ There are a lot of exciting things in store for @fraxfinance $FRAX once its collateral ratio (CR) hits 100%, but CR increase has stalled over the past month. Why?

I took a deeper dive into the mechanics of Frax CR to learn how it works.
🧵👇
#crypto Image
2/ First, an apology. Several weeks ago, I wrote a thread about FRAX CR with the below chart projecting 100% CR to be reached by mid-June. I was very wrong in assuming that the path would be linear. Here's why...👇 Image
3/ Collateral ratio is a dynamic value that depends on changing variables such as Total Protocol Controlled FRAX, ETH Holdings, FRAX Supply, and Outstanding $FPI. I did the math below to show how the current numbers work out to the ~94.75% CR listed on app.frax.finance Image
Read 10 tweets
StableScarab🪲(¤,¤) Profile picture
Jun 2
1/ $frxETH by @fraxfinance has seen incredible growth, reaching 230k+ $ETH in ~6 months driven by the top APR of their LSD $sfrxETH.

However, sfrxETH APR is now at the lowest it has ever been?! Here's why there's no need to worry and how frxETH design keeps them on top.
🧵👇 Image
2/ First, if you haven't heard about $frxETH and how it allows sfrxETH stakers to get the highest APRs available, check out my $frxETH thread and see the flowchart below to learn more about how it works. Image
3/ Top 5 LSDs: According to @DefiLlama, Frax has been temporarily dethroned from the top APR by @stakewise_io with 5% vs Frax's 4.7%. What explains the decline?👇 Image
Read 9 tweets
StableScarab🪲(¤,¤) Profile picture
May 31
1/ Why are #crypto tokens so prone to pumping and dumping? Tokenomics.

Well-designed tokenomics can help protocols achieve rapid adoption. Without care, they can also lead to massive dumps.

The parallels between tokenomics and PID control and why it matters for your bags. 🧵👇 Image
2/ What's PID Control? Proportional-Integral-Derivative control is a widely used mechanism that uses feedback to reach a set point.

The best example of PID is cruise control. PID ensures that when you set a speed you arrive at it quickly w/o overshooting. en.wikipedia.org/wiki/PID_contr… Image
3/ We won't go into P vs I vs D here. Just know they are factors that can be adjusted to control how you arrive and maintain a value, just like how tokenomics are factors that control how a token arrives at its fundamental value. For crypto let's say Pump It, Dump (PID) factors.
Read 10 tweets
StableScarab🪲(¤,¤) Profile picture
May 19
1/ Riding the Multistage Rocket: Analyzing Rocket Pool Tokenomics:
@Rocket_Pool has established itself as THE decentralized #ETH liquid staking protocol, approaching 600k ETH fueled by their recent Atlas upgrade. Can this trajectory lead to sustainable $RPL gains? Let's see.
🧵👇 Image
2/ Rocket Pool's mission is to improve the decentralization of ETH staking by lowering the barrier to entry for node runners. 32ETH required for staking is currently $58k! RP lowers this to 8ETH. ~60% of the RP network is running 1-2 nodes showing the success of this mission. Image
3/ How does Rocket Pool's innovative protocol do this? RP pairs node operators with $rETH holders who want staking returns but don't want to run nodes. Node operators get a commission of the supplied ETH rewards. See @tokenmotion_io thread here:
Read 14 tweets
StableScarab🪲(¤,¤) Profile picture
May 1
1/ The @fraxfinance $FRAX collateral ratio jumped to 94.75% today.

Why you have ~6 weeks to accumulate $FXS before the collateral ratio is 100% full charged and profits overflow to holders.
🧵👇
#crypto Image
2/ What is collateral ratio? Collateral Ratio (CR) is the percentage of FRAX backed by collateral, the rest by FXS. After starting at 100%CR, Frax initially allowed the market to determine the collateral ratio over time, see full history below. Image
3/ In February, FRAX passed FIP-188 to set the target CR back to 100%. While lower levels are more capital efficient, in a post-Luna collapse world, consumers want the safest design possible which is 100% collateral-backed. gov.frax.finance/t/fip-188-incr…
Read 8 tweets

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