[FIP - 412] Liquidity Creation for FRAX/AFRAX Pair

Authors: Allstake Team

Summary: We propose that Frax Finance allocate 200,000 FRAX to provide initial liquidity for the FRAX/AFRAX pair on Curve. This proposal is designed to support liquidity creation, encourage staking, and boost the adoption of FRAX as a core DeFi asset within the Allstake ecosystem.

Background and Motivation: Allstake is an omnichain (re)staking protocol designed to bring shared security to multiple chains. Our team comprises crypto veterans who were early contributors NEAR and EOS, with backing from the NEAR Foundation and angel investment from Illia Polosukhin, co-founder of NEAR Protocol. By providing liquidity to the FRAX/AFRAX pair, Frax will enhance the liquidity and stability of FRAX while gaining exposure to Allstake’s unique meshed restaking mechanism. This opens up new avenues for staking, restaking, and utility for the FRAX stablecoin, providing more earning opportunities for FRAX users

For more information: https://linktr.ee/allstake_fi

Proposal Details:

• Liquidity Requirement: Frax will allocate 200,000 FRAX for liquidity creation.
  • 100,000 FRAX will be deposited into Allstake to receive 100,000 AFRAX.
  • The 100,000 FRAX and 100,000 AFRAX will then be used to create a liquidity pool on Curve (FRAX/AFRAX).

Risk Analysis: There is minimal risk associated with this liquidity provision as Frax has full ownership of the LP position and can always choose to withdraw from the pool. There is also no impermanent loss. Allstake’s contracts are fully open-source and audited. Frax’s allocation will be secured within these audited contracts, and the liquidity provision helps solidify the use case of FRAX as a key DeFi asset. Review Allstake’s audits here: https://docs.allstake.org/security/audits

Voting:

• For: Allocate 200,000 FRAX to provide initial liquidity for the FRAX/AFRAX pair on Curve.
• Against: Do nothing.