Frax Finance's Fed yield-matching staking vault attracts $30M, FXS steady

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Frax's governance token FXS is in stasis as the decentralized finance protocol's nascent high-yielding staking product draws millions in investor mone

y. Early Thursday, Frax unveiled sFRAX, an ERC4626 staking vault allowing holders of the protocol's partially collateralized fractional-algorithmic stablecoin FRAX to earn yields matching the U.S. Federal Reserve's interest rate on reserve balances , currently around 5.4%. The product debuted with an APY of 10%, eventually converging with the Fed's 5.4% IORB rate. So far, more than 150 users have poured in more than $35 million in the vault, according to Dune Analytics.

The new offering comes as lending protocol MakerDAO enjoys a first-mover advantage in capitalizing on high interest in the U.S. According to Parsec Finance, MakerDAO has invested over $2 billion in short-term bonds via offchain structures since February 2022, offering a 5% savings rate on DAI and buy back its MKR token. On a year-to-date basis, MKR has gained over 168%, outshining bitcoin's 62% rise by a big margin. FXS, meanwhile, has gained only 32% this year.

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