Sorry noob question - does frax that is got via

Question

Sorry noob question - does frax that is got via

fraxlend ever enter into circulating supply?

Can it be used to build up a substantial position similar to that of what happened in UST when it drained their curve pool

#cryptocurrency #english #frax

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16.05.2022

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Squnchy Автор вопроса

What collateral do they have to give - and is it over collateralised? I.e if they borrow 1000 usd worth of FRAX , do they have to put up more or less than 1000 usd of collateral ?

0

16.05.2022

Jefe ElJefe

Squnchy
What collateral do they have to give - and is it ...

Don’t know yet… presumably individuals would have to be overcollateralized while there may be potential to do undercollateralized loans to protocols.

0

16.05.2022

Jefe ElJefe · Accepted Answer

Large loans could be used to attack peg if they are significantly sized compared to the available liquidity… currently would need more than 600 million frax. Before contraction would have needed a billion frax. But the person doing the attack in this manner would have to buy back the frax that they sold to pay off their loan, or frax keeps their collateral. There may be a way to game this by shorting fxs, but it can easily be avoided with some sensible size limits compared to available liquidity.

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Sorry noob question - does frax that is got via

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