What’s the worst case for FRAX, in terms of backing?

Question

Frax Finance

Good Pepe

What’s the worst case for FRAX, in terms of backing?

$.80?

#cryptocurrency #english #frax

0

11.05.2022

17 ответов

10 просмотров

Sam Kazemian ¤⛓️¤

In current market conditions, FRAX depeg is not mathematically even possible (assuming no smart contract risk/explots). This is because even though the CR technically reports 87% no one can actually depeg FRAX in any market conditions. It's very easy to see this when you simulate it. There's only 2.5B FRAX in existence. 1.55B of it is in the Curve pool. If you try to sell 1B FRAX in a single sell order for Tether on Curve right now, assuming you had all of the supply of FRAX at one time, you would not even lower the price below $.9970. This doesn't even take into account any of the hundreds of millions of dollars of liquidity on Uniswap v3. This is just a Curve simulation.

0

11.05.2022

Sam Kazemian ¤⛓️¤

In current market conditions, FRAX depeg is not ma...

^this doesn't even account for the fact that the AMO would rebalance the price back to 1.000. This is assuming no rebalancing even. The reality is the price would be still very close to 1.000 in all possible market conditions.

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11.05.2022

Sam Kazemian ¤⛓️¤

In current market conditions, FRAX depeg is not ma...

I think even mid curvers understand this easily ^

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11.05.2022

PowerMoves

Sam Kazemian ¤⛓️¤

In current market conditions, FRAX depeg is not ma...

how much of the liquidity in the curve pool is owned by Frax?

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11.05.2022

Deo

Sam Kazemian ¤⛓️¤

In current market conditions, FRAX depeg is not ma...

what pool is this one?

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11.05.2022

Sam Kazemian ¤⛓️¤

Deo
what pool is this one?

FRAX3CRV

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11.05.2022

Samuel

Sam Kazemian ¤⛓️¤

In current market conditions, FRAX depeg is not ma...

This is what central bankers do with money markets to create liquidity. Big brain shit @samkazemian

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11.05.2022

Jason

Sam Kazemian ¤⛓️¤
^this doesn't even account for the fact that the A...

Is 4pool on main net still happening?

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11.05.2022

Jae |

Jason
Is 4pool on main net still happening?

We still have plans for it but this should help you understand: https://t.me/fraxfinance/196334

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11.05.2022

KPMFVW

Jae |
We still have plans for it but this should help yo...

I don’t think this is still valid

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11.05.2022

Cat

Jae |
We still have plans for it but this should help yo...

can remain as 3 pool for now kek

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11.05.2022

James Glasscock | Reserve.org

Sam Kazemian ¤⛓️¤

In current market conditions, FRAX depeg is not ma...

Sam is a potential successful future attack to depeg possible if for some reason the market minted a lot of FRAX (cool additional FRAX use cases take off) such that the Curve pool no longer had the majority of FRAX in existence? how would the Curve AMO react to an exponential expansion of FRAX supply?

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31.05.2022

Sam Kazemian ¤⛓️¤

James Glasscock | Reserve.org
Sam is a potential successful future attack to dep...

Right now the Curve AMO would just mint more FRAX into the pool if there is more FRAX demand somewhere (cool FRAX use cases taking off) since FRAX is mainly acquired through Curve or Uniswap and not minted unless the peg is significantly above $1.000

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31.05.2022

James Glasscock | Reserve.org

Sam Kazemian ¤⛓️¤
Right now the Curve AMO would just mint more FRAX ...

interesting. Is it accurate to say, FRAX has outsourced minting and redemption to the Curve/Uniswap pools managed by their respective AMOs?

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31.05.2022

Sam Kazemian ¤⛓️¤

James Glasscock | Reserve.org
interesting. Is it accurate to say, FRAX has outso...

Yes that's one way to think about it 🙂

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31.05.2022