Dear admin, Few months ago, I saw that CR of frax

Question

LuffyX1991

Dear admin, Few months ago, I saw that CR of frax

is already reach 100% and I heard that the community is already pass the vote to let the avenue flow to veFxs holder. why now the Cr of frax is 95.93% ?

#cryptocurrency #english #frax

0

22.09.2024

10 ответов

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LuffyX1991 Автор вопроса

Dantes Stan (¤, ¤) | DON'T DM FOR ETH|$$
There are some factors which affects the CR. For e...

Thanks for your explain, but suppose that once it go to 100 % it will be stable at 100% or can it go down again if fxs go down ?

0

2 месяца назад

Westwood

LuffyX1991
Thanks for your explain, but suppose that once it ...

If it’s backed solely by stable assets then it would stay at 100

0

2 месяца назад

Klaasek

Westwood
If it’s backed solely by stable assets then it wou...

there is other ways to keep it at cr 100 i came with a suggestion to that in discord.

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2 месяца назад

Jason

Klaasek
there is other ways to keep it at cr 100 i came wi...

Can you mention them here too? I want to hear it

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2 месяца назад

Klaasek

Jason
Can you mention them here too? I want to hear it

Rn the big problem for CR is volatile assets in the backing. Since we calc the full value of the volatile assets that can swing with 50% up and down in a year it can give a wide range on the CR. When it goes up it ofc creates good days at a higher lvl, but when we go the other direction we can see in here how people are reacting. So one way to combat is by accounting diffently for volatile assets. here is some examples for eth in how we can calculate the pricing : Using the last bear's bottom price. or use twap of a year for the pricing. only count x% of the value of eth. This will stunt some of the growth when everything is going well, but at the same time reduce the downside when the market turns bearish.

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2 месяца назад

LuffyX1991 Автор вопроса

Westwood
If it’s backed solely by stable assets then it wou...

So if cr as above 100, we have high apr, if it below 100, the apr will be low, and this loop will be like this forever ?

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2 месяца назад

Klaasek

LuffyX1991
So if cr as above 100, we have high apr, if it bel...

not necessary, apr is also based on the fees coming in, price of fxs and how much is staked.

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2 месяца назад

C2tP

Klaasek
Rn the big problem for CR is volatile assets in th...

Cr isn't just a feel good number though. In times of stress those assets may need to be liquidated to support the price of the stable coin thus saying "well it was a bit higher a few months ago" doesn't really count if you need the money now

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2 месяца назад

Klaasek

C2tP
Cr isn't just a feel good number though. In times ...

thats a fair point, but then it supports even more to have a cap on the pricing of the volatile asset that will be moved at certain situations (wont lock down which rn) so that if its goes below it will be countaed at that price but if it goes above we will still use the cap. rn people are not afraid of the CR is because there is more locked liquidity than can be lost in the event of a bankrun, but if we take eth at current pricing and had to sell the eth rn, because you need the money now im pretty sure you wont get 1:1 pricing either way

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2 месяца назад

Dantes Stan (¤, ¤) | DON'T DM FOR ETH|$$ · Accepted Answer

Dantes Stan (¤, ¤) | DON'T DM FOR ETH|$$

There are some factors which affects the CR. For example, the price of FXS still affects the CR as long as there is FRAX-FXS POL on Fraxswap. If FXS price drops a lot, then the IL in the POL drops the CR. Likewise, if FXS price rises, the positive value increase in POL raises the CR. Also various other small factors such as the minor amount of volatile collateral that does still back FRAX like sfrxETH.

0

2 месяца назад

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