This proposal aims to describe the frxETHBP and WETHR program and authorize an allocation of incentives to increase liquidity in AMMs, DAOs, and protocols with an underlying token of frxETH.
Frax Ether is a liquid ETH staking derivative designed to uniquely leverage the Frax Finance ecosystem to maximize staking yield and smooth the Ethereum staking process for a simplified, secure, and DeFi-native way to earn interest on ETH.
In just 85 days, frxETH has gone from 0 to 50k in supply, which was an essential milestone for Frax and highlighted the success of its design. But it also shows that Frax Finance has a great product that can be quickly adopted by the mass market.
However, as we look to the future, it’s essential to focus on creating deep liquidity for frxETH. This will improve the trading experience for current holders, make it more attractive for new users to enter the market, and drive further adoption.
The WETHR (WETH Replacement) program is an incentive system made to make frxETH a viable alternative to WETH in smart contracts after Shanghai withdrawals are live.
We propose allocating a budget for incentives to increase liquidity in AMMs with underlying tokens of frxETH. sfrxETH in liquidity pools or protocols is not eligible for this program. sfrxETH can receive their own independent incentives through the gauge system. The frxETH incentives include, but are not limited to, the following actions:
- Bribing Gauge votes
- Vote with protocol voting power
The Frax core team will spend it for frxETH liquidity proportional to the number of tokens in the liquidity pools, and using incentives will be AMM agnostic so that they can be used for any AMM platforms such as Curve, Fraxswap, etc.
The budget for this proposal will be the farming rewards from frxETH and sfrxETH pools held by the frxETH Treasury and a maximum of $2.4 million worth of FXS from the bi-weekly Votium budget (FIP) that can be spent for any AMM platform. It should be noted that this is the maximum amount that will be used for incentives and not necessarily the exact amount.
For: Authorize an allocation of incentives to increase liquidity in AMMs with an underlying token of frxETH, with the mentioned details.
Against: Do nothing.