Authors

Frax Core Team

Summary

This proposal seeks to provide liquidity providers within the Frax Finance ecosystem the option to exchange their locked liquidity in certain pools for timed locked Frax Bond 2027 (LFXB2027) at the auction price.

Background and Motivation

Following the success of FIP 379, which allowed LPs to exit their positions through a standard exit mechanism, there has been continued interest in providing additional options for liquidity providers who wish to exit their locked positions. To address this, we propose adding LFXB2027 as a new exit option, offering liquidity providers more flexibility while maintaining the integrity and stability of the Frax ecosystem.

Proposal Details

This approach offers liquidity providers a way to exit their positions while maintaining their investment within the Frax ecosystem, ensuring the protocol's stability and growth. The following points are important to note about this proposal:

• Pricing Based on Underlying Assets: The pricing for the locked liquidity will be based on the current price of the underlying assets at the time of the exchange.
• Exchange with LFXB2027: Locked liquidity can be exchanged for LFXB2027 at the auction price prevailing at the time of the exchange. An LP that wishes to migrate can sign the migration transaction on the Ethereum mainnet and move their LP token/NFT to the protocol to receive LFXB2027 tokens directly to the same address on the Fraxtal mainnet.
• Extra Option Alongside FXB2029: It is important to emphasize that LFXB2027 is being introduced as an additional option. Liquidity providers still have the choice to exit their locked positions through FXB2029, ensuring that they can select the exit strategy that best suits their needs.
• Designated Locked Liquidity for Exchange: Only certain designated pools will be eligible for this exchange option, but this list can be expanded through the governance process.

Pool	Gauge Address
Uniswap V3 FRAX/USDC	0x3EF26504dbc8Dd7B7aa3E97Bc9f3813a9FC0B4B0
Uniswap V3 FRAX/DAI	0xF22471AC2156B489CC4a59092c56713F813ff53e

• Option to Retain LPs: Liquidity providers will have the option to either exchange their locked liquidity for FXB2029 or LFXB2027 or retain their current locked positions.
• No Ragequit Fee: There will be no Ragequit fee for liquidity providers choosing this exchange method, ensuring a cost-effective transition.
• FXTL points: Migrators that receive LFXB2027 for their positions will be entitled to all FXTL points multipliers for all LFXB2027 holders, making it a high-yield opportunity within the Frax ecosystem.
• TimedLocker for FXBs: The TimedLocker allows liquidity providers to stake their FXB tokens in exchange for fixed-rate FXS rewards, with the total amount of FXB stakable being capped. Locked positions are transferable as vault tokens, enabling users to sell or transfer their stakes without waiting for the lock period to end. Once the set ending timestamp is reached, all positions become unlockable.

Voting

• For: Approve the option for liquidity providers to exchange their locked liquidity for LFXB2027 at the auction price.
• Against: Do nothing.