McFly

TRC #004 - Enable frxETH/WETH Gauge on Ethereum

Voting ended about 3 years agoSucceeded

Summary

Enabling the frxETH/WETH Gauge on Ethereum.

References/Useful links

Website: https://app.frax.finance
Documentation: https://docs.frax.finance
Github: https://github.com/FraxFinance/frax-solidity

Communities:

Telegram: https://t.me/fraxfinance
Discord: https://discord.gg/UJVtDTFRaA
Governance Discussion: https://gov.frax.finance
Governance Voting: https://snapshot.org/#/frax.eth
Twitter: https://twitter.com/fraxfinance

Protocol/Product Description

Frax Ether is a liquid ETH staking derivative designed to uniquely leverage the Frax Finance ecosystem to maximize staking yield and smoothen the Ethereum staking process for a simplified, secure, and DeFi-native way to earn interest on ETH. ETH in the Frax ecosystem comes in two forms, frxETH (Frax Ether) and sfrxETH (Staked Frax Ether).

frxETH acts as a stablecoin pegged to ETH, so one frxETH always represents 1 ETH, and the amount of frxETH in circulation matches the amount of ETH in the Frax ETH system. When ETH is sent to the frxETHMinter, an equivalent amount of frxETH is minted. Holding frxETH on its own is not eligible for staking yield and should be considered analogous to holding ETH.

sfrxETH is an ERC-4626 vault designed to accrue the staking yield of the Frax ETH validators. At any time, frxETH can be exchanged for sfrxETH by depositing it into the sfrxETH vault, which allows users to earn a staking yield on their frxETH. Over time, as validators accrue staking yield, an equivalent amount of frxETH is minted and added to the vault, allowing users to redeem their sfrxETH for a greater amount of frxETH than they deposited.

Motivation

frxETH/WETH gauge, on the one hand, helps Frax to incentivize liquidity for frxETH by providing bribes (WETHR Program). On the other hand, it creates an opportunity for liquidity providers to gain yield when they are staking ETH or ETH-equivalent assets.