# \[FIP - 405\] Significantly downsize PyUSD Position

**URL:** <https://gov.frax.finance/t/fip-405-significantly-downsize-pyusd-position/3273>\
**Category:** Governance Proposals\
**Created:** [September 5, 2024, 12:54am UTC](https://gov.frax.finance/t/fip-405-significantly-downsize-pyusd-position/3273 "2024-09-05T00:54:58Z")\
**Posts on this page:** 3\
**Page:** 1

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**Author:** ![MichaelHenry](https://avatars.discourse-cdn.com/v4/letter/m/7feea3/32.png) [@MichaelHenry](https://gov.frax.finance/u/MichaelHenry)\
**Post date:** [September 5, 2024, 12:54am UTC](https://gov.frax.finance/t/fip-405-significantly-downsize-pyusd-position/3273/1 "2024-09-05T00:54:58Z")

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**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

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**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 16, 2024, 6:34pm UTC](https://gov.frax.finance/t/fip-405-significantly-downsize-pyusd-position/3273/2 "2024-09-16T18:34:53Z")

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This proposal is up for voting here: [Snapshot](https://snapshot.org/#/frax.eth/proposal/0x136f1ebca7c23a9bf1bf6523718531737aec4b2d735020d69c6530528e3111ab)

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**Author:** ![sparkes25](https://yyz1.discourse-cdn.com/flex031/user_avatar/gov.frax.finance/sparkes25/32/392_2.png) [@sparkes25](https://gov.frax.finance/u/sparkes25)\
**Post date:** [September 23, 2024, 7:12pm UTC](https://gov.frax.finance/t/fip-405-significantly-downsize-pyusd-position/3273/3 "2024-09-23T19:12:17Z")

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your asking convex to vote to reduce the amount staked in convex.

its like asking turkeys to vote for chirstmas.

i would advise to split this in to 2 votes, one for the liquidity pool and one for the convex staking.