Frax Finance

Author: Mark11 - Fraximalist community member

Revised proposal - this proposal has been revised to remove discussion about liquidity assistance or migration to a Fraxswap pool until a further vote. This proposal will only deal with the unlocking of current LPs and the transfer of the current FRAX-IQ pool to the Frax gauge system program.

Summary

This proposal, if passed, would move the FRAX-IQ FXS rewards pool to Fraxswap and the FXS gauge reward system. The current FXS emissions directed to FRAX-IQ are to be ceased and retained in the treasury.

Background

Currently, we are spending about $8mm a year in FXS on rewards for the FRAX-IQ pool which has a TVL of $5.6mm. The FRAX-IQ pool is an outlier in that its rewards are not set by the gauges - I propose that we change that.

While we are very close to the Everipedia community, I think it is time we reassessed whether the current arrangement serves either community very well - as it appears to create inefficient dilution to FXS holders and does not allow Everipedia to use its IQ token to bribe in the gauge system.

For example, it would be far more beneficial for FXS holders if we bonded FRAX-IQ in through Olympus Pro for FXS - at the end of a year instead of paying out $8mm in FXS for temporary liquidity of $2.8mm in FRAX we would own $8mm worth of FRAX-IQ liquidity.

Everipedia themselves have been using Olympus Pro to build up their own liquidity - pulling in $1.4mm on ETH mainnet and $250K on Arbitrum.

This should provide Everipedia some buffer if there are LP’s who decide to cease liquidity provision as a result of moving the FRAX-IQ pool to the Frax gauge system.

Motivation

This proposal’s motivation is to:

1. Cease inefficient dilution to FXS holders directed at the FRAX-IQ pool outside the FXS gauge system
2. Allow the Everipedia community to use its IQ token for gauge reward bribes instead of co-pool incentives

Proposal

This proposal will:

1. Unlock the current FRAX-IQ pool liquidity providers
2. Transfer the current FRAX-IQ pool to the FXS gauge system with immediate effect.

This will allow Everipedia to use IQ incentives to bribe their gauge and compete in the Frax wars which is beneficial to both Frax and Everipedia.

The current FXS emissions directed to FRAX-IQ are to be ceased and retained in the Frax community treasury.

Vote

For - Transfer FRAX-IQ pool to the FXS gauge system

Against - Do nothing