Hello everyone,
First, thank you for approving our first proposal. We took into account the reviews from Frax community members that our first proposal was not very detailed, and here is an updated version of Lend Flare first proposal.
Summary:
Create a new partnership between Frax and Lend Flare by:
- Integrating Frax as a supplied asset on Lend Flare, which will create a new yield opportunity for Frax stablecoin holders and allow loans of Frax against most Curve LP on Lend Flare.
- Doing co-marketing (Twitter AMA, shared documentation, joint Medium article, mutual communication inside both communities).
The problem Lend Flare aims to solve:
More than a dex, Curve can be seen as a liquidity reserve or somehow a DeFi saving account. At the moment, this liquidity earns a yield composed of curve rewards and trading fees.
Nevertheless, there are few additional opportunities for curve LP holders to take advantage of this huge liquidity, especially with low risk and high flexibility. Lend Flare provides a solution to this problem.
A quick presentation of Lend Flare:
Lend Flare is a decentralised borrowing platform on Ethereum blockchain. Its added value is to allow Curve LP holders (the borrowers) to draw fixed-rate, fixed term and high LTV loans against Curve LP used as collateral, with no concerns for assets being liquidated due to price fluctuation.
Liquidity providers (the lenders) who deposit loan liquidity for borrowers on Lend Flare receive in exchange a share of loan fees and an incentive in LFT token (Lend Flare governance token) for their participation. LFT tokenomics follow the curve ve-model, with a fair launch (no seed rounds, team get only 2% of max supply with a 2-year linear vesting).
Why is Lend Flare interested in a partnership with Frax?
- As part of its core strategy, Lend Flare already proposes to its borrowers a large selection of curve LPs, including the fraxCrv (frax+3crv) pool. But, at the moment, only USDC, DAI, wBTC, ETH can be borrowed against curve LPs. Lend Flare wants to integrate different supplied assets mainly for three reasons:
- Stay at the forefront of innovation in DeFi, by proposing new products seen as robust, like Frax.
- Diversify our supplied assets with a view to minimizing risks
- Offer more choices to users according to their personal preference
Frax stablecoin as a supplied asset fits these 3 criterias, and it’s the main reason for its integration and our partnership proposal.
- Moreover, with the upcoming launch of Lend Flare V2 and V3 ( especially the launch of Lend Flare synthetic stablecoin), we also have in mind other use cases for Frax in Lend Flare that can enrich Lend Flare new features. This can be discussed later in another proposal, with more technical details.
How can Frax benefit from a partnership with Lend Flare?
Lend Flare is a low risk, high LTV borrowing platform. By allowing Frax as a supplied asset, Lend Flare creates new use cases for Frax stablecoin. With Lend Flare growth, it’s reasonable to expect growth in Frax adoption on Lend Flare too.
- By creating a Lend Flare supply pool for Frax stablecoin, it creates a yield opportunity for Frax holders who are willing to provide liquidity. At the moment, there are plenty of opportunities with usdt/usdc/dai, but to our knowledge much less with Frax stablecoin. Lend Flare can help fill this gap.
Below, the supply yields on Lend Flare (20/04/2022, 10:30 utc). Frax suppliers could expect similar yields, depending on their locked LFT amounts.
With Lend Flare fair tokenomics (low vesting continuous release, low-medium inflation), we hope that this opportunity will be sustainable in the long run. - Frax could be borrowed up to 85% LTV on Lend Flare, with all curve LPs as collateral, and especially frax3crv as collateral. Potentially, this will lead to an increase in the number of Frax users.
- Frax could be borrowed up to 85% LTV on Lend Flare, with all curve LPs as collateral, and especially frax3crv as collateral. Potentially, this will lead to an increase in the number of Frax users.
- Besides, after the V2 release, for all curve LPs deposited on Lend Flare, and so frax3crv, CRV and CVX rewards are going to be automatically compounded. Hence, Frax3crv holders will receive a reward boost up to 50%.
As said in the answer to the previous question, Lend Flare V2 and V3 will bring new features, and if frax community becomes confident about Lend Flare platform, the partnership between the two protocols could evolve according to our mutual interest.
Concerning our past proposal:
The last two points inside our last proposal (frax-lft token swap, Curve pool with Frax/Lend Flare synthetic asset) is what Lend Flare team aims for in the near future, after the integration of Frax as a supplied asset.
At the moment, with the upcoming releases of Lend Flare V2 and Curve 4pool, we would like to focus more on raising awareness between Lend Flare and Frax communities, before submitting another proposal with all the necessary technical details (like the borrow interest model for frax stablecoin, initial frax funding …). So here is below our updated proposal.
Our updated proposal:
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Integration of Frax as a supplied asset on Lend Flare.
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A Frax Medium article, co-written, on how to supply Frax and frax3crv on Lend Flare.
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Continuous interactions directly with both communities, on Discord/Telegram, by sharing and discussing updates about both protocols.
The Lend Flare team