Authors:
Michael Henry
Overview
Frax is holding a significant amount of PyUSD on it’s balance sheet that is earning a very insignificant amount of interest. Frax should diversify away from holdings that have low-interest generation.
Position Overview:
As of this post, the existing positions are:
- PyUSD held in Curve FRAX/PYUSD: $1,760,722 earning 0.04%
- PyUSD Staked in Convex: $617,874 earning 1%
Combinedm Frax owns $2,378,596 of PyUSD. Additionally, Frax has allocated $11,103,288 of FRAX towards those pools, bringing the total amount allocated to $13,481,884.
Closing Thoughts
FRAX is sprinting towards 100% CR and needs to hyper-optimize how it allocates it’s funds and make sure that no money is being inefficiently supplied. Therefore, I recommend that we exclusively allocate capital where it can generate the highest yield which in this case is the Fraxlend AMO.
Voting:
- For: Reduce the PyUSD position to a maximum of $500,000 PyUSD and $500,000 FRAX.
- Against: Keep existing PyUSD allocations