Frax bonds are an awesome product. Could there be any

Question

Frax Finance

Nomada Amador

Frax bonds are an awesome product. Could there be any

risk that wont allow one to claim back to frax when they mature?

#cryptocurrency #english #frax

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08.05.2024

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Nomada Amador Автор вопроса

Sam Kazemian ¤⛓️¤
No risk of the debt not being repaid, it’s trustle...

Beautifully explained, love it ser

0

6 месяцев назад

Sam Kazemian ¤⛓️¤ · Accepted Answer

No risk of the debt not being repaid, it’s trustless and you can see that the contract itself has the FRAX inside it and the function to claim on maturity is permissionless. The only actual risk analysis for FXB is analyzing whether FRAX itself will be at the dollar peg on the date of maturity. That’s the actual risk. There’s no risk of not being repaid FRAX tokens. It’s very similar to treasury bills from the US government, you know that you’ll get repaid the nominal debt since the government can print dollars. There’s no nominal risk of default. The real risk is in analyzing inflation and if holding tbills makes you lose purchasing power when you get repaid dollars in the future. Same concept with FXBs, you can be sure you’ll get repaid in FRAX since the debt is denominated in FRAX and the protocol has issued the FRAX already in the FXB contract. There’s no risk of default. But the risk is if FRAX will actually be at peg and solvent or if you get repaid a FRAX stablecoin that’s no longer as stable as you expected. With that said, I think all things considered, that’s a pretty safe assumption but obviously not financial advice nor a guarantee. Use DeFi carefully at your own risk.

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Frax bonds are an awesome product. Could there be any

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