understand where the forthcoming increase in sFRAX yield will come from? Something to do with sUSDe?
You got it
What happens if sUSDe depegs, meaning way less Frax can be redeemed than was used to originally buy it? Is it possible for the exchange rate of between sFRAX and FRAX to be reduced represent this loss?
Then we sell the susde
But what if its an extremely fast and violent depeg. Let's imagine one or multiple of the CEX's that custody the funds blowup at the same time, meaning ethena lose the funds. Or anything else that may lead to a rapid depeg. So best price you can get on the market for susde is 0.5 frax. How is the system set up the handle this, or is it not at all?
is Ethena tightly-coupled with $FXS frax?
It wouldn’t be in that circumstance.
then the ETH in their Fireblocks custody can be released
Okay lets just imagine that there is a fast depeg/bankrun on USDe for another reason, maybe one we can't predict. It goes to $0.5 before any can be sold within sFrax. Can the system handle this, and if so, how? Basically, how does sFrax deal with loss. Unbacked Frax will be minted in to make up the shortfall, or sFrax devalued via the exchange rate, or another way?
I’d love to answer this but you’ll have to ask a dev or someone more knowledgeable
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