Hey @samkazemian , why not automatically convert unused Frax liquidity

Question

Hey @samkazemian , why not automatically convert unused Frax liquidity

in Fraxlend into sFRAX and then back to Frax when used? This would boost lender APY, create deeper liquidity, and keep borrowing costs low while maintaining or increasing lender rewards. Thoughts?

#cryptocurrency #english #frax

0

12.09.2024

4 ответов

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Michael Henry

Yeah, my idea is basically a round-about way of implementing this. Because you could implement the UI such that you can borrow/lend FRAX and it'll automatically convert it for you

0

2 месяца назад

Klaasek Автор вопроса

Michael Henry
Yeah, my idea is basically a round-about way of im...

the differnce is you still borrow frax, not sfrax

0

2 месяца назад

Michael Henry

Klaasek
the differnce is you still borrow frax, not sfrax

Yeah, the upside is that you don't need to redeploy the Fraxlend smart contract or modify the underlying contract. So we can do it today. You're using the same primitive but expanding it to different uses. The borrowing/lending token being sFRAX is an implementation detail and you can hide that from the user by enabling deposits and payment using either token on the UI.

0

2 месяца назад

Bueno Pues · Accepted Answer

Bueno Pues

By converting unused frax to sFRAX, Frax is essentially earning yield from itself. Converting the backing of Frax into something yield bearing makes sense to me, but, the way taht sFRAX gets it yields, I dont see how this helps. Can you provide more context?

0

2 месяца назад

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Hey @samkazemian , why not automatically convert unused Frax liquidity

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