Decentralized finance application Frax Finance is briskly gaining favor among investors for its strong product suite as liquid staking derivatives heat up ahead of Ethereum's impending Shanghai upgrade.
Frax's staked ether product launched in October is attracting capital. Users deposit ether and receive the Frax ether token , which is backed 1:1 with ether. This frxETH token can be freely traded or staked on other DeFi applications or on Curve’s liquidity pools – where stakers are currentlyAt writing time Tuesday, FrxETH holds just above $100 million, data from DeFiLlama shows. This is a nearly $50 million bump since the start of January, and nearly four times since November.
“FRAX has an advantage over other LSD platforms at the moment due to their outsized CRV/CVX treasury holdings,” said Hal Press, partner at crypto fund North Rock in a tweet this week. “This allows them to stimulate higher ETH staking yield on their staked ETH derivative product than the rest of the market.”
Curve offers a highly efficient way to exchange stablecoins while maintaining low fees and low slippage, according to documents from Curve Finance. Pools currently deployed on Curve are backed by centralized or decentralized stablecoins, wrapped tokens – such as wrapped bitcoin – or a basket of various assets.High trading volumes on liquidity pools on Curve that involve Frax contributes towards the FRAX token holding their intended dollar peg.
fraxfinance shauryamalwa Exciting to see FraxFinance's success as investors flock to their strong product suite. Can't wait to see how liquid staking derivatives perform post-Ethereum Shanghai upgrade. DeFi
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