FIP 86 - Concentrator Frax Vault


Introduce Concentrator Frax vault to Frax AMO with initial allocation of 10m FRAX

Background and Motivation

Concentrator is an auto-compounding vault system, that instead of selling rewards constantly for more of the deposited token, it helps farmers concentrate yields from multiple Convex vaults into cvxCRV, then leverages auto-compounding to further grow those returns. When withdrawing, users can choose from cvxCRV, CRV, CVX or ETH.

Frax vault has been deployed on Concentrator since the product inception, and depositors of the vault have seen consistent enhancement of approx. 30-50% over the existing APR offered by Frax vault on Convex. We believe that our Frax vault has and will continue to benefit Frax protocol and its community long term, because

  1. LPs of Frax+3Crv can enjoy much higher yield, i.e. ~30-50% more on top of the existing APR from Convex.
  2. Large amount of the yield will be captured by Frax protocol given its POL, which further strengthens the APY for Frax community members. As higher TVL will increase harvesting frequency thus increase overall APY achieved by all LPs in the vault.
  3. Auto-compounding by Concentrator effectively turns APR into APY without repetitive withdraw / deposit operations that require multisig signing from the protocol, and hence improves Frax’s operation efficiency significantly.
  4. Since the Frax vault on Convex doesn’t offer FXS reward, the auto-compounding will not pose sell pressure to FXS

Concentrator has announced our IFO - Initial Farm Offering. During the IFO, by depositing into our vaults, depositors will exchange their yield for Concentrator’s governance token CTR, while their initial deposit is intact.

CTR bestows token holders governance power of the protocol, especially on how to allocate the protocol revenue. To further demonstrate the decentralization and community-first nature of Concentrator, all CTR will be emitted by the end of the IFO (with 50% distributed to IFO farmers). CTR has no team or investor allotment, nor does it have any involuntary lockups or vesting, so there will be no future unlocks to worry about. Details can be found here.

This presents a huge opportunity to the Frax community as Frax related vaults are also included in the IFO event, which means you are automatically entitled to a portion of Concentrator’s governance and its future revenue.

From a protocol’s point of view, it’s also very beneficial to Frax if it decides to participate with some of its treasury holdings. Not only would Frax be part of the meta governance of Concentrator, it would also directly gain access to the CRV earnings generated by Concentrator.

With an initial 10m FRAX allocated from Frax, this could further improve the capital efficiency and incentivize the utilization of the vault, and more importantly, boost the benefits for Frax protocol and the community.

We admire the vision and achievements of Frax, and see a great deal of synergies between us two protocols. In the future, we would like to continue working together with Frax and supporting each other in multiple aspects.

For: Deploy Concentrator Frax vault AMO with 10m FRAX allocation

Against: Do nothing

im a bit confused, it says this is a revised proposal but it says its your first post?

you also say this is a revised FIP-54, but FIP-54 has already passed a vote and it was for Citadel

Hey Sparkes
I have gave it a new number to avoid any confusion. It is my first post on the forum, you are right. The previous entry was made by another contributor from Aladdin DAO, but you are right, I should’ve mentioned this in my post.

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Hey guys, I like this proposal and the overall ecosystem Concentrator is building! My suggestion to maximize the chance it will pass is to perhaps first put up a proposal for a Concentrator gauge for your vaults so that extra FXS rewards can be added to the yield your users get.

As for the protocol AMO, I think it is a good idea but should potentially come after a gauge to limit the amount of additional risk minting FRAX into new protocols. At least that’s what I think the community might be concerned with in current market conditions.

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