# \[FIP-289,290\] Add Arrakis LST Vaults of frxETH/FRAX to FXS Gauge Controller

**URL:** <https://gov.frax.finance/t/fip-289-290-add-arrakis-lst-vaults-of-frxeth-frax-to-fxs-gauge-controller/2618>\
**Category:** Gauges\
**Created:** [September 25, 2023, 2:52pm UTC](https://gov.frax.finance/t/fip-289-290-add-arrakis-lst-vaults-of-frxeth-frax-to-fxs-gauge-controller/2618 "2023-09-25T14:52:24Z")\
**Posts on this page:** 2\
**Page:** 1

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**Author:** ![barbarossa\_Arrakis](https://yyz1.discourse-cdn.com/flex031/user_avatar/gov.frax.finance/barbarossa_arrakis/32/1361_2.png) [@barbarossa\_Arrakis](https://gov.frax.finance/u/barbarossa_Arrakis)\
**Post date:** [September 25, 2023, 2:52pm UTC](https://gov.frax.finance/t/fip-289-290-add-arrakis-lst-vaults-of-frxeth-frax-to-fxs-gauge-controller/2618/1 "2023-09-25T14:52:24Z")

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## Summary

Add a gauge for each frxETH/FRAX Arrakis LST (Liquid Staking Token) Vault - one on Mainnet and the other on Arbitrum.

**Mainnet**  
Uni pool: 0x36C060Cc4b088c830a561E959A679A58205D3F56  
PALM vault: 0xB00fbB12656Ba2580E4D8f54e1aa7b75408FD037

**Arbitrum**  
Uni pool: 0x631bCab02663855349035B761eD111A5BCB521Dc  
PALM vault: 0x0C2708496c705eFa34921581eC768F0bf4ff1BF4

Additionally, the vault on Arbitrum may be double incentivized by Arbitrum grant once our application is approved.

## Background & Motivation

### Arrakis Finance and Arrakis LST Vaults

Arrakis Finance is a non-custodial on-chain market-making protocol that builds both the infrastructure and the strategies that enables and execute sophisticated algorithmic market-making on Uniswap V3.

Arrakis LST Vaults are permissionless and incentivizable LP infrastructure that provide algorithmic market-making strategies for LST assets. They are designed to solve the critical challenges that LST protocols and LPs currently are facing:

- **High cost for maintaining deep liquidity**  
Deep liquidity is crucial for LSTs as staying tightly pegged on the secondary market is what qualifies a liquid staking token liquid. Traditionally, it is exceedingly expensive to maintain sufficient liquidity depth and protocols have spent tens of millions worth of incentives for it.

- **IL (Impermanent Loss) risk for LPs**  
LPs are in constant struggle between earning liquidity mining incentives and taking on IL risk. The amount of IL risk is directly correlated to the size of the exposure the liquidity has to the market.

### How Frax can benefit from it

First of all, even though both frxETH and FRAX already have quite deep liquidity on their own, the direct liquidity for frxETH/FRAX is rather thin and poorly managed at the moment. Arrakis LST Vaults can help increase the liquidity depth of frxETH/FRAX while only requiring limited capital and incentives.

Secondly, frxETH is mostly paired with ETH or other LSTs, and FRAX is mostly paired with other stablecoins. A liquid market of frxETH/FRAX can efficiently route the swaps between frxETH and other stablecoins or between FRAX and other LSTs, which will lead to wider circulation of frxETH and FRAX.

Furthermore, LP positions in Arrakis LST Vaults can act as collaterals and be integrated into lending markets.

Arrakis has been assisting Frax with liquidity management since Arrakis V1 product, and we would like to strengthen this long-term relationship with more and better services that can further benefit the Frax community.

## Vote

_Note that there will be two separate snapshot votings for each vault_

**For** : add both Arrakis LST (Liquid Staking Token) Vaults of frxETH/FRAX - one on Mainnet and the other Arbitrum - to FXS gauge controller.

**Against** : do nothing

## Reference

[Website](https://www.arrakis.finance/)

[Mirror](https://mirror.xyz/0x916563f8476b988855af0b8b8A3D56072E1917FA)

[Docs](https://resources.arrakis.fi/)

[Audits](https://resources.arrakis.fi/resources/audits)

[Twitter](https://twitter.com/ArrakisFinance)

[Discord](https://discord.com/invite/arrakisfinance)

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<div class="post-metadata">

**Author:** ![nader.frax](https://yyz1.discourse-cdn.com/flex031/user_avatar/gov.frax.finance/nader.frax/32/1849_2.png) [@nader.frax](https://gov.frax.finance/u/nader.frax)\
**Post date:** [September 28, 2023, 4:44pm UTC](https://gov.frax.finance/t/fip-289-290-add-arrakis-lst-vaults-of-frxeth-frax-to-fxs-gauge-controller/2618/2 "2023-09-28T16:44:18Z")

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[[FIP-289] Add Arrakis LST Vaults of frxETH/FRAX (Mainnet) to FXS Gauge Controller](https://snapshot.org/#/frax.eth/proposal/0x4c3f381b7c7b74f6208d3bf9c1ab4a10006580617c1f0c6e135af018a1cc662a)  
[[FIP-290] Add Arrakis LST Vaults of frxETH/FRAX (Arbitrum) to FXS Gauge Controller](https://snapshot.org/#/frax.eth/proposal/0xac50d24196c5358dd3cc6f227c9007e6ba15d36eee8b19843bc7aff92c876db5)