Just spit balling some thoughts here... When I think of

Question

Just spit balling some thoughts here... When I think of

the potential of frax, i see the protocol offering a monetary premium over the full interest rate liquidity cycle. Frax offers the full vertical, on-chain liquidity stack for investors.

In high interest rate environments, investors seek exposure to the lowest risk-rate, high yielding financial investment - US Treasury bonds. FRAX and FRAX BONDS will offer simplistic onchain exposure for investors. In a low interest rate, investors move higher up the risk curve. The thesis, is that the yielding low-interest rate financial instrument of choice will be ETH. frxETH and sfrxETH offer unique investment opportunities here. If ETH becomes one of the dominant low-interest rate "internet bonds" for investors, then there is the opportunity to trap liquidity onchain on the trough of the next liquidity cycle with tokenised treasury bills.

Due to Frax's two token approach, the protocol is able to offer a monetary premium on yields for both of these financial investments which offers a unique product market fit. With Frax Lend, you already have the lending market integrated. Spit balling some thoughts, do you think infrastructure (a liquidity pool in particular) that shifts from Frax Bonds, into sfrxETH, and vice versa dependant on external data on interest rates would be an useful product? Essentially, acting as an asset manager for users looking to gain exposure to the full liquidity cycle. Obviously deeper questions regarding, weights vs interest rates, but curious to hear peoples thoughts.

#cryptocurrency #english #frax

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20.08.2023

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AC T · Accepted Answer

AC T

Yeah I think you definitely figured it out

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20.08.2023

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Just spit balling some thoughts here... When I think of

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