[FIP - 277] Onboard FinresPBC as FRAX v3's Offchain RWA Partner

Hey @EasternBeaver23 great questions.

1.) For overhead costs, I don’t think it should be very high. It would really just be things like wire fees/minting/redeeming fees (for example Tether has fees but USDC/USDP do not so these fees aren’t relevant for now but could be in the future if some stablecoin providers enact them). And there will likely need to be 1 or 2 salaried people at a modest market rate for a manager to keep the lights on and manage assets. Then the final costs would be for periodic audits and transparency reporting. Overall, I expect these costs/fees to be significantly below peers and not much. For example, if FinresPBC holds $500m of assets for Frax Protocol, I don’t expect the annual cost of fees/salary/reporting costs to be higher than $100-200k. That would be about 2-3 days worth of the yield of that principal to pay for the entire operation the whole year. That would be very economical. We aren’t big on bureaucracy and running up costs as this community knows. We do things professionally, cleanly, and efficiently. To put it bluntly, I’m confident that the FinresPBC costs would be substantially lower costs to do the same thing compared to peer protocols like Maker’s model or other structures. I’d venture to say it could even be an entire order of magnitude less costly due to no profit-seeking fees by FinresPBC and also our commitment to extreme efficiency and low bureaucracy.

2.) We didn’t do USDT because we’re having a hard time getting accepted to mint/redeem USDT. As I’m sure many people in crypto are aware of, Tether is quite reclusive and we aren’t aware of a single entity that can mint/redeem Tether. And none have helped us or reached out. And Tether has not either. I am not trying to imply anything about Tether’s backing or make FUD statements. Just answering your question about exactly why we don’t have Tether mint/redeeming yet. We might have it in the future if we can figure it out.

3.) In theory FinresPBC would be able to do arbitrage yes, but I don’t really think that’s a good use of time and resources in terms of accomplishing the mission itself. While it might sound good to make some revenue for the DAO doing arbitrage through FinresPBC, I’d rather just let the free market take care of that.

4.) We’ve thought about this a lot yes. When FRAX v3 specs are released, you will see that question answered in full. :wink: