You swap two assets (frax and fxs). Both have value.

Question

You swap two assets (frax and fxs). Both have value.

Both are liquid. Only difference: one tends to be more stable in terms of price vs usd (but both of them can't guarantee of course). Now why is the one used in calculation of CR and not the other?

#cryptocurrency #english #frax

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13.11.2023

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Sam Kazemian ¤⛓️¤ · Accepted Answer

Because the definition of the CR is literally “all collateral that is exogenous that backs FRAX” meaning every asset that is not FXS. It is the measurement that describes how collateralized a stablecoin is. You are not supposed to count the governance token of the protocol itself. It’s just the definition. If you want to calculate a new CR that includes the FXS we’ve bought back, you’re more than welcome to count that, but it would basically be th “Luna CR” of the protocol which we know is not a great metric to go off of.

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You swap two assets (frax and fxs). Both have value.

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