Hey guys! reading up about FraxV3. just wanted to ask

Question

Hey guys! reading up about FraxV3. just wanted to ask

a few things. FraxV3 is going to remove redemptions for Frax.

1. Does that mean that the peg maintenance of Frax will be purely by AMO operations?

If yes, then how will the specific AMOs work to maintain the peg of Frax after V3 is implemented?

Like for e.g, if Frax goes above $1, what are the specific actions that the Curve AMO, Fraxlend AMO and Fraxswap TWAMM AMO take to bring Frax back to $1?

Would love to get your help on this @samkazemian

#cryptocurrency #english #frax

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11.10.2023

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FarmerTuHao - WILL NOT DM YOU FIRST Автор вопроса

Sam Kazemian ¤⛓️¤
This was previously misunderstood before by someon...

Oh yes I understand this point. It's just that with Frax going to 100% CR, was just wondering if there's going to be any changes to how the AMOs specifically work. Previously, let's say for the Curve AMO, how it works is that Frax will decollaterlze and the excess collateral will be used to placed into Curve pools and Frax will be minted to pair with the collateral going into the pool. Once Frax reaches 100% CR in V3, I believe there won't be any decollaterization correct? Where would the excess collateral come from to be placed inside Curve pools?

0

11.10.2023

Sam Kazemian ¤⛓️¤ · Accepted Answer

This was previously misunderstood before by someone as well. Admittedly it’s not explained clearly in the docs so we will fix it. But the idea with non-redeemability isn’t some kind of trick. It just means holding FRAX does not entitle you to a particular asset offchain or onchain specifically. The FRAX balance sheet will always try to keep the stablecoin at peg and governance is socially expected to always put the peg above all else like FXS profit etc. But the idea of pointing out non-redeemability is to be clear holding FRAX, sFRAX or FXBs doesn’t entitle the holder to some sort of legal claim of treasury bills, RWAs, or cash. We wanted to be clear about that.

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Hey guys! reading up about FraxV3. just wanted to ask

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