[Frax] [FIP - 405] Significantly downsize PyUSD Position

Quorum: 6.33m CVX

Authors: Michael Henry

Overview Frax is holding a significant amount of PyUSD on it’s balance sheet that is earning a very insignificant amount of interest. Frax should diversify away from holdings that have low-interest generation.

Position Overview:

As of this post, the existing positions are:

• PyUSD held in Curve FRAX/PYUSD: $1,760,722 earning 0.04%
• PyUSD Staked in Convex: $617,874 earning 1%

Combinedm Frax owns $2,378,596 of PyUSD. Additionally, Frax has allocated $11,103,288 of FRAX towards those pools, bringing the total amount allocated to $13,481,884.

Closing Thoughts FRAX is sprinting towards 100% CR and needs to hyper-optimize how it allocates it’s funds and make sure that no money is being inefficiently supplied. Therefore, I recommend that we exclusively allocate capital where it can generate the highest yield which in this case is the Fraxlend AMO.

Voting:

• For: Reduce the PyUSD position to a maximum of $500,000 PyUSD and $500,000 FRAX.
• Against: Keep existing PyUSD allocations