Gearbox has gotten noticeable traction after the launch of Leverage Ninja mode. FRAX related assets have become the most popular since then with more than $25M worth of FRAX/3CRV and $4M worth of FRAX/USD convex/curve pools* which makes it reasonable to consider adding a separate Gearbox FRAX pool in order to increase available liquidity and decrease liquidation risks at the same time.
Proposal
Taking into account the popularity of FRAX related assets as well as recent proposal from the FRAX community to seed FRAX pool with 2M FRAX**, I propose to create a new pool: FRAX 0x853d955aCEf822Db058eb8505911ED77F175b99e with the same parameters as for the USDC and DAI pools (100k min borrow and 1M max borrow). This would help to attract liquidity from FRAX holders and also allow less risky FRAX borrowing and bigger leverage when using FRAX as collateral.
Set up Asset LTs for FRAX pool as below:
Token
FRAX pool LT (%)
WETH
85
stETH
82.5
WBTC
85
USDC
92
DAI
92
FRAX
94.5
USDT
90
sUSD
90
gUSD
90
LUSD
90
steCRV
82.5
cvxsteCRV
82.5
FRAX3CRV-f
90
cvxFRAX3CRV-f*
90
3Crv
90
cvx3Crv*
90
LUSD3CRV-f
90
cvxLUSD3CRV-f*
90
crvPlain3andSUSD
90
cvxcrvPlain3andSUSD*
90
gusd3CRV
90
cvxgusd3CRV
90
crvFRAX
90
cvxcrvFRAX
90
yvDAI
90
yvUSDC
90
yvWETH
82.5
yvWBTC
82.5
yvCurve-stETH
82.5
yvCurve-FRAX
90
CVX
25
FXS
25
LQTY
0
CRV
25
LDO
0
SNX
25
GEAR liquidity mining incentives shall be discussed and voted in a separate proposal.
I agree that FRAX is a a suitable addition, but thinking about the idea that the lending pools are in essence isolated. (the lent ETH, can never be exposed to any sort of a FRAX supply risk). there is little reason not to add largecap, adopted assets. Its mostly a factor of will it get enough supply and then will that supply get utilized.
Update: the pool creation is pending coordination with Frax development team, to kickstart the pool closer to the required date. Naturally, the launch of FRAX pool is conditional upon finalizing that work first.
What’s the APY target here now then? I assume it should be in line with USDC, DAI, and LUSD (if that gets voted on). So if the “regular size” pool is 5%, then 2M AMO should be “under regular size” - meaning we need to figure out what the regular size for FRAX could be. 5-10M maybe? Wdyt @amplice & others
I think aiming for ~4% APY at 10M makes sense, so maybe the ‘regular size’ here should be something like 8m? We can see how the demand is and adjust as needed.
Perhaps it makes more sense to scale rewards upwards rather than downwards, so maybe at first aim for 5% on 5m, if we hit that and there’s some organic demand (and particularly if it is driving new TVL rather than siphoning TVL from existing stables) then we can boost?
