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How does the protocol earn revenue for FrxETH v2? Does

it keep 10% of the interest paid?

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Ya it is like a lending market. Frax can collect a fee on all interest rates. But the interest rates themselves are not fixed to a hard coded value. For comparison, Rocket Pool or other designs don't have this dynamic rate. Node operators just pay "commission" (aka fixed fee) on the ETH that they "borrow inside their validator" which they don't own.

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