Is there a “red line” in terms of fxs price

Question

Is there a “red line” in terms of fxs price

that we should not cross as it puts the protocol in existential danger?

You could argue fxs market cap should be above the algo “unbacked” part of frax outstanding. However this seems purely psychological. The peg will remain bc of a factor, locked frax and pol.

If there is no “red line” fxs price i would be in favor of just letting the free market do its thing.

I would be in favour of buybacks if we have achieved product market fit, are consistently profitable and the market is not in a complete panic mode (equities could drag us into another -90%…)

#cryptocurrency #english #frax

0

14.06.2022

3 ответов

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Marko

H¤reτ¤r¤
There is also an issue that LP'ing is not interest...

this, buyback for tokens like FXS or OHM, which is used to accrue revenue (bribing / bonding) is necessary in times when the protocol feels it's undervalued since it's an asset that u use to create revenue, so you're more capital efficient and cause less inflation if the token value is higher, not only that, protocol would aquire decent amount of FXS at low prices, which could be burned or even used to buff veFXS yields if deemed necessary, (burn -> less fxs on the market, fxs up, yield -> staking/locking fxs more attractive, fxs up), a lot of people think that the buyback will be sold into but they're underestimating how much less FXS will be emitted (esp after POL), it's pretty much a policy thing, when u feel like u are overvalued u expand supply (to garner more revenue), when u feel like u are undervalued u constrict supply

0

14.06.2022

H¤reτ¤r¤

Marko
this, buyback for tokens like FXS or OHM, which is...

Yes but the thing is that its completely undecided yet as what to do with the bought back funds. Im not suggesting to burn them, but for sure there are a lot more valuable things to do with it in the future. As its completely undervalued now.

0

14.06.2022

H¤reτ¤r¤ · Accepted Answer

H¤reτ¤r¤

There is also an issue that LP'ing is not interesting anymore with a low FXS price. This will lead to a decline in (locked) FRAX. The higher the FXS price the better the yield. Also bribes are paid from FXS. The bribes are denominated in $. So the higher FXS is in $ the less emissions.

0

14.06.2022

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Is there a “red line” in terms of fxs price

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