AstralFXS: Yield Bearing FRAX Derivative. Partnership Request

Governance Proposals Token Swap / Seed funding
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Summary.

This is a partnership request proposal from the Astral Protocol to the FRAX DAO / FRAX Protocol.

Astral Protocol would like to work with the FRAX community to finish the automation and auditing of an on-chain yield beariving FRAX derivative token called AstralFXS.

AstralFXS Summary

AstralFXS was deployed on December 21st, 2024.
See Fraxscan link here.
See facts.frax here.

Similar to wstETH, AstralFXS tokens are designed to be soft-pegged to the value of FRAX, with increasing relative value over time.

The AstralFXS sub-protocol generates yield by deploying AstralFXS Treasury held FRAX and AstralFXS tokens into top performing strategies on Fraxtal. Including sdFXS staking, WFRAX-sdFXS convex farming, FXTL point farming, concentrated AstralFXS-WFRAX liquidity, and using FRAX as collateral to borrow other tokens to use in non FRAX based strategies.

The yield generated from the AstralFXS sub-protocol’s DeFi strategies is used to buy and burn AstralFXS tokens. As the circulating supply of AstralFXS tokens is reduced, the value of AstralFXS tokens relative to FRAX tokens increases perportionately.

Read the full details on how the AstralFXS protocol operates in this Mirror Article.

FRAX Dao & Astral Protocol Partnership Proposal

The Astral Protocol is asking for support from the FRAX DAO to deploy and audit a smart contract that automates the process of deploying AstralFXS Treasury Assets, collecting yield, distributing yield, and maintaining the AstralFXS peg rate. Astral is also asking for AstralFXS to be whitelisted on frax.com and for AstralFXS to be added to the FXTL points list, with the same FXTL disribution rate of FRAX tokens that have been deployed to BAMM.

In exchange, Astral Protocol offers the FRAX DAO 4% of the net revenue generate by AstralFXS in perpetuity. In terms of annual Revenue, AstralFXS could provide several hundred thousand dollars a year or more for the FRAX Protocol / DAO.

Based on the yield generated by AstralFXS since deployment, with 1M AstralFXS in circulation and a FRAX value of $4 each, the AstralFXS sub protocol would generate $120K per year in revenue for the FRAX DAO.

In addition to providing revenue, AstralFXS can also become a major positive economic factor for FRAX. Since AstralFXS compounds 100% of yield into FRAX, the AstralFXS is essentially a growing sinkhole for FRAX tokens that purchases growing amounts of FRAX over time and never sells any FRAX.

Proposal Requirements

If this partnership request proposal is approved, the FRAX DAO may decide whether to support the development of the AstralFXS protocol through either

A. Granting 30K FRAX to Astral Protocol to use for AstralFXS development costs

Or

B. Developing the neccesary AstralFXS contract(s) in-house through Frax Protocol developers.

Either way, the FRAX DAO would also be responsible for choosing a partner to Audit AstralFXS and paying for the AstralFXS audit.

Regardless of whether this proposal is approved, we hope that FRAX community will support this initiative with frax.com whitelisting for AstralFXS.

All feedback is welcome on this proposal. Please share your thoughts.

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While I do think your idea has some merit, and that it could become a interesting project, I feel like you have some misconception of Frax’s role in your project. Instead of directing resources away from our core mission by getting a FRAX or developer time, you should try and bootstrap your project in other ways. Perhaps you should consider starting a project and having some type of IDO? It would be interesting if you create a Astral token, and try to raise $30k within the community. Use your energy to raise funds within the community and create a grassroot project. If you end up creating some tokenomics and a IDO, it would be better to ask Frax if they want to invest in it with a specific deal then.

Either way, the FRAX DAO would also be responsible for choosing a partner to Audit AstralFXS and paying for the AstralFXS audit.

I personally find the above comment arrogant. While the team would probably assist you in security or auditing in some way or form, it is not their responsibility. It does not reflect confidence and reliability for your project.

1 Like
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What is the target yield for AstralFXS please?

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There is no target yield rate.

AstralFXS yield is highly variable pending current market conditions related to available FXS based DeFi strategies and the volatility of FRAX tokens.

So far, the historical yield rate has been very high, due primarily to the extreme amount of volatiljty of FRAX tokens during the recent FRAX bull run.

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Thank you for taking the time to provide critical feedback in a supportive manner.

Your proposed concept to run an IDO to gather funding support from individuals in the FRAX community is an excellent idea.

If the AstralFXS partnership proposal is denied by the FRAX DAO, i will further explore interest in an AstralFXS IDO.

Regarding your perspective about the “arrogant” comment in the AstralFXS proposal, it appears there may be some misunderstanding.

Please allow me to add some context.

If the AstralFXS Partnership Proposal is approved and if the FRAX DAO wants to receive 4% of the net revenue generated by the AstralFXS Protocol, then the “FRAX DAO would also be responsible for choosing a partner to Audit AstralFXS and paying for the AstralFXS audit.”

The FRAX DAO is by no means obligated to accept this partnership proposal. However, directly supporting the Audit process of AstralFXS is a direct requirement in order for the FRAX DAO to receive 4% of AstralFXS revenue in perpetuity.

Regarding your comment that this proposal is “directing resources away from FRAX’s core mission”:

From my perspective, the AstralFXS Partnership Proposal is an excellent opportunity for the FRAX DAO to direct a small amount of resources into making a massive positive impact on the core mission of the FRAX DAO.

In terms of return on investment, this partnership proposal provides an opportunity for the FRAX DAO to convert a small amount of money into a relatively massive, permanent, and growing revenue stream.

A one time payment of 90K could likely result in hundreds of thousands of dollars a year in FRAX protocol revenue, potentially resulting in a return on investment of over 10 times in the next 10-20 years, and a return on investment over 40 times in the next 50 years.

In addition, to an incredible ROI, this proposal could also result in millions of FRAX tokens being bought from the open market and locked forever into a compounding veFRAX position, which would greatly increase the value of FRAX over time.

@Sharkysnakefish Thank you once again for taking the time to share your perspective while providing critical feedback in a supportive manner.

Id like to hear from you regarding what the core mission of FRAX is and whether or not growing FRAX Protocol revenue and increasing the value of FRAX fits within that mission.

I’d also appreciate questions regarding how likely the possibility is of AstralFXS scaling into providing a 40x ROI for the Frax DAO while also removing millions of FRAX from open circulation.