Title: [ARFC] Add sFRAX on Ethereum V3

Author: @0xlide, @SaucyBlock and ACI (Aave Chan Initiative)

Date: 2024-01-18

Summary

This publication presents the community an opportunity to add sFRAX to the Ethereum Aave V3 Liquidity Pool.

Motivation

Staked FRAX (sFRAX) is an ERC-4626 staking vault that distributes a portion of the Frax Protocol yield. sFRAX APY attempts to roughly track the interest on reserve balances (IORB) rate of the United States Federal Reserve.

Integrating sFRAX as collateral asset in the Aave V3 Ethereum Pool has the potential to create new demand for borrowable assets on Aave V3, such as stablecoins and FXS.

Specification

Ticker: sFRAX Contract Adress: 0xA663B02CF0a4b149d2aD41910CB81e23e1c41c32 Chainlink Oracle: 0xB9E1E3A9feFf48998E45Fa90847ed4D467E8BcfD

Parameter	Recommendation
Isolation Mode	NO
Borrowable in Isolation	NO
Stable Borrow	NO
Enable Borrow	NO
Enable Collateral	YES
Loan To Value	70.00%
Liquidation Threshold	75.00%
Liquidation Bonus	6.00%
Reserve Factor	20.00%
Liquidation Protocol Fee	20.00%
Supply Cap(sFRAX)	10.00M
Borrow Cap(sFRAX)	N/A
Uoptimal	N/A
Base	N/A
Slope1	N/A
Slope2	N/A

Next Steps

1. If consensus on ARFC stage is reached and risk service providers provide feedback on risk parameters, escalate to ARFC snapshot stage.
2. If ARFC snapshot stage outcome is YAE, escalate to AIP stage

Disclaimer

ACI is not presenting this ARFC on behalf of any third party and are not compensated by any entity for creating this ARFC.

Copyright

Copyright and related rights waived via CC0.