# \[FIP - 428\] Frax North Star Proposal - V2

**URL:** <https://gov.frax.finance/t/fip-428-frax-north-star-proposal-v2/3652>\
**Category:** Governance Proposals\
**Created:** [March 9, 2025, 7:17am UTC](https://gov.frax.finance/t/fip-428-frax-north-star-proposal-v2/3652 "2025-03-09T07:17:52Z")\
**Posts on this page:** 1\
**Showing post:** 17

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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:** [March 17, 2025, 6:02am UTC](https://gov.frax.finance/t/fip-428-frax-north-star-proposal-v2/3652/17 "2025-03-17T06:02:00Z")

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# Frax North Star Proposal - V2.1

## Authors

Frax Core Team

# Summary 2.1

This proposal seeks to implement the upgrading of FXS, the Frax North Star Hardfork, the Tail Emission Plan, and the Flox Capacitor Boost. The proposal includes:

- Renaming of the original FRAX token to: Legacy Frax Dollar.
- Renaming of FXS to FRAX: will unify branding efforts and reduce confusion.
- Renaming of veFXS to veFRAX: in line with the other renamings.
- North Star Hardfork: FRAX (prev. FXS) will become the gas token on Fraxtal, replacing frxETH. It will also facilitate setting up ETH2-like validators in a future update later. This will provide even more utility for the FRAX (prev. FXS) token.
- Tail Emission Plan: Introduces 8% yearly FRAX (prev. FXS) emissions, dropping 1% a year to a floor of 3% in 5 years. These will be directed to FXTL point conversions, community discretionary, DAO discretionary, and team retention.
- Flox Capacitor (floxCAP) Boost: A new boosting system designed so users can boost their FXTL conversion rate by locking FRAX (prev. FXS) into a special FRAX staking contract with a fixed 90 day cooldown for withdrawal. veFRAX balances will also qualify for the floxCAP boost.
- FXTL Conversion: Every week, ~2% of a user’s FXTL will be converted to FRAX. Conversion rate depends on the user’s floxCAP. Total sum of all FRAX released for conversions subject to tail emission plan.

# Background and Motivation

Frax Finance has consistently been at the forefront of decentralized finance, pioneering innovative solutions for stablecoin issuance, yield mechanisms, and governance. As the ecosystem evolves and expands, it is crucial to adapt and enhance its economic and governance structures to align with long-term growth and decentralization. Many top tier projects are upgrading token structures and utility to better prepare their ecosystem and community for success such as Sonic (prev. FTM), Fluid (prev. Instadapp), and more.

# Proposal Details

1. Renaming of tokens & multi-chain strategy

2. North Star Hardfork

3. Upgrade of veFXS to veFRAX & sfrxUSD Rewards

4. frxUSD Income  
The backing of frxUSD will come from high-quality direct-held (non-rehypothecated) T-Bills / RWAs including RWA tokens (BUIDL, SuperState, brokerage-held T-Bills etc), repos, and other short-term cash-like structures. The protocol itself can thereby earn income from these sources. Holding frxUSD alone will not automatically entitle a holder to any yield from these sources, but it is envisioned that select strategic partners and institutions may be able to earn marketing incentives for doing so. For example, if the Acme Project DAO on Chain XYZ wants to seed a large $25M TVL frxUSD/ACME pair, and they reach out to the Frax protocol, they may be able to, subject to the discretion of the DAO / Community, receive marketing incentives for the frxUSD portion of said LP pair. The same applies, for example, to any chain that wants to enshrine frxUSD as a key stablecoin in their economy.

5. sfrxUSD Yield and Fees

6. Clarification of protocol revenue destinations (Revenue Plan)

7. Establishment of the Tail Emission Plan & Tokenomics

| Token | Annual Token Unlocking | Annual Token Emission | Annual Token Circulating Supply Inflation | Note |
| --- | --- | --- | --- | --- |
| CRV | 9.24% | 7.54% | 16.78% | CRV inflation at 4th year (2023 -2024) |
| ETH | - | 6.04% | 6.04% | Ethereum inflation at 4th year (2018 - 2019) |
| NEAR | 14.97% | 5.0% | 19.97% | Near inflation at 4th year (2023 - 2024) |
| SOL | - | 4.91% | 4.91% | Solana’s annual inflation rate at 4th year |
| ENA | 15.2% | - | 15.2% | ENA inflation rate at 4th year (2027 - 2028) |
| S | 2.2% | 7.5% | 9.7% | S inflation rate at first year (2025 - 2026) |
| ARB | 15.7% | Up to 2% | 15.7% ~ 17.7% | ARB inflation rate at 4th year (2026-2027) |
| OP | 44% | ~ 2% | 44% ~ 46% | OP inflation rate at 4th year (2025-2026) |
| FRAX (FXS) | - | 8% | 8% | FRAX inflation rate at First Year (2025 - 2026) which is 4th year of Frax Finance. |

_Disclaimer: The data presented in this table is based on the best available research and industry sources. However, due to changes in tokenomics, governance decisions, and market conditions, some figures may be subject to revision and should not be considered definitive._

1. FXTL points conversion

2. Flox Capacitor (floxCAP) Boost Mechanism:

3. Frax Burn Engine (FBE)

# Voting

- For: Approve the Frax North Star Hardfork, Tail Emission Plan, Flox Capacitor, and FXS Upgrade

- Against: Do nothing.

### References:

- [CRV supply. (n.d.). Google Docs.](https://docs.google.com/spreadsheets/d/1kFFdaLCX8ISM7yzvfUmuz151QiRzrFfaljCzEiO6sus/edit?gid=0#gid=0)
- [CurveFi. (n.d.). Supply & Distribution - Curve resources.](https://resources.curve.fi/crv-token/supply-distribution/#crv-emissions-for-the-next-10-years)
- [Ultra Sound money. (n.d.).](https://ultrasound.money/)
- [Etherscan.Io. (n.d.). Ether Supply Growth Chart | EtherScan. Ethereum (ETH) Blockchain Explorer.](https://etherscan.io/chart/ethersupplygrowth)
- [Polosukhin, I. (2022, October 10). Introduction to NEAR Protocol’s Economics. NEAR Protocol.](https://near.org/blog/near-protocol-economics)
- [Team, N. (2024, August 14). NEAR token supply and distribution. NEAR Protocol.](https://near.org/blog/near-token-supply-and-distribution)
- [Solana Tokenomics : Circulating Supply, Inflation Schedule & Token Unlock Dates + Tracker. (n.d.).](https://solanacompass.com/tokenomics)
- [Tokenomics | Ethena. (n.d.).](https://docs.ethena.fi/ena/tokenomics)
- [S Token | Sonic Documentation | EVM Layer-1 Blockchain. (n.d.).](https://docs.soniclabs.com/sonic/s-token)
- [Arbitrum Tokenomics and unlock schedule - Tokentrack. (n.d.). TokenTrack.](https://tokentrack.co/tokens/arbitrum)
- [The $ARB token: A conceptual overview | Arbitrum DAO - Governance docs. (n.d.).](https://docs.arbitrum.foundation/concepts/arb-token)
- [[PUBLIC] OP Token unlock (Estimated). (n.d.). Google Docs. ](https://docs.google.com/spreadsheets/d/1qVMhLmmch3s6XSbiBe8hgD4ntMkPIOhc1WrhsYsQc7M/edit?gid=470961921#gid=470961921)
- [OP Token Overview | Optimism Docs. (2024, August 14).](https://community.optimism.io/op-token/op-token-overview)

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_[View the full topic](https://gov.frax.finance/t/fip-428-frax-north-star-proposal-v2/3652)._