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title: [ARFC] Add FRAX Arbitrum Aave v3 discussions: https://governance.aave.com/t/arfc-add-frax-arbitrum-aave-v3/13222 shortDescription: Add FRAX Arbitrum Aave v3 author: @Fig - Flipside & @TokenLogic created: 05-06-2023

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References

Website: https://frax.finance/ Whitepaper: https://docs.frax.finance/overview Documents: https://docs.frax.finance/ Analytics: https://facts.frax.finance/ Github: https://github.com/fraxfinance

Arbitrum Contract Address: Abritrum: 0x17FC002b466eEc40DaE837Fc4bE5c67993ddBd6F

Oracle Address: Arbitrum: 0x0809E3d38d1B4214958faf06D8b1B1a2b73f2ab8

Audits

• 11/2020: Certik
• 07/2021: Trail of Bits
• 01/2022: Trail of Bits

Summary

This publication presents the community an opportunity to add FRAX to the Arbitrum v3 Liquidity Pool.

Motivation

FRAX can use its Lending AMO (similar to Maker’s DAI Direct Deposit Module) to mint protocol controlled FRAX to be lent out on Aave Protocol. Frax Finance has in the past done so in Aave v2 on Ethereum and has already stated on the Aave governance forum an interest in doing so on other deployments once FRAX is added.

The Frax Finance team could deploy a similar Aave Lending AMOs to Aave v3 after FRAX is listed.This will provide Aave users with access to FRAX and present an alternative to the four USD stable coins on Aave v3.

Users are able to borrow FRAX and earn yield across DeFi, such as on Curve Finance and Convex Finance.

Specification

1. What is the link between the author of the AIP and the Asset ?

There is no link between the authors and the core teams of the asset.

2. Provide a brief high-level overview of the project and the token ?

See summary.

3. Explain the positioning of the token in the AAVE ecosystem. Why would it be a good borrow or collateral asset?

FRAX is a popular stablecoin to borrow, with its Lending AMOs it is able to mint protocol-owned FRAX to ensure low interest rates.

4. Provide a brief history of the project and the different components: DAO (is it live?), products (are they live?). How did it overcome some of the challenges it faced?

FRAX is a stablecoin and mintable/redeemable so it does not have a governance token emission schedule.

5. How is the FRAX token currently used ?

FRAX is a popular stablecoin to borrow, with its Lending AMOs it is able to mint protocol-owned FRAX to ensure low interest rates.

6. Emission schedule

FRAX is a stablecoin and mintable/redeemable so it does not have a governance token emission schedule.

7. Token (& Protocol) permissions (minting) and upgradability. Is there a multisig? What can it do? Who are the signers?

There is a multisig which can operate certain AMO contracts but cannot in any way change users’ FRAX balances, cannot freeze or pause any user’s funds, and cannot in any way alter the behavior of the protocol or sweep/rug collateral or value. There are no FRAX whitelists/blacklists in any capacity as it is entirely a bearer asset/decentralized exactly like DAI.

8. Market data (Market Cap, 24h Volume, Volatility, Exchanges, Maturity)

Arbtirum

Market Cap: ~$22,425,936.51 24h Volume: ~$50M

Volatility: stablecoin (extremely low) Exchanges: Arbitrum Launch Date: 27/09/2021

Date of deployment: Dec 20th, 2020 Number of crosschain token holders: 25,000+

The protocol currently holds over $1,004,053,174.00 in TVL across all chains

9. Social channels data (Size of communities, activity on Github)

• Discord: https://discord.com/invite/eKXUxaKJXT
• Governance Discussion: https://gov.frax.finance
• Governance Voting: https://snapshot.org/#/frax.eth
• Twitter - https://twitter.com/fraxfinance

10. Contracts date of deployments, number of transactions, number of holders for tokens

Supply: 22,425,936.51 Holders: 9,383 Transfers: 427,627

Risk Analysis

Parameter	Value
Isolation Mode	Yes
Borrowable	Yes
Collateral Enabled	Yes
Supply Cap	7.00M units
Borrow Cap	5.50M units
Debt Ceiling	1.00M units
LTV	70.00%
LT	75.00%
Liquidation Bonus	6.00%
Liquidation Protocol Fee	10.00%
Variable Base	0.00%
Variable Slope 1	4.00%
Variable Slope 2	75.00%
Uoptimal	80.00%
Reserve Factor	10.00%
Stable Borrowing	Disabled
Flashloanable	Yes
Siloed Borrowing	No
Borrowed in Isolation	No

Copyright

Copyright and related rights waived via CC0.