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 10% yearly FRAX (prev. FXS) emissions, dropping 0.7% a year to a floor of 3% in 10 years. These will be directed to FXTL point conversions, veFRAX stakers, community discretionary, DAO discretionary, and team retention.
Flox Capacitor (floxCAP) Boost: A new boosting system designed so users can boost the amount of tokens their FXTL points convert to by locking FRAX (prev. FXS) into a special FRAX staking contract.
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:
While we realize these rebrandings might initially cause minor confusion, in the interest of branding and frxUSD expansion efforts, we propose that:
“Legacy” FRAX (the original stablecoin) will be renamed to Legacy Frax Dollar
(the FXS logo will not be used anywhere going forward)
FXS will be renamed to FRAX. FRAX will continue to govern emissions, revenue-sharing, gauge emissions, and protocol incentives, reinforcing Frax’s decentralized economic model.
veFXS will be renamed to veFRAX
Full Usability of Legacy Tokens: The FXS token (now renamed to FRAX) will remain fully usable across the Frax ecosystem and supported protocols and chains, ensuring continuity for all existing integrations and holders. FXS can upgrade 1 to 1 to FRAX on Fraxtal chain at any time.
Multi-Chain Strategy Based on OFT Standard: FRAX will continue its multi-chain expansion and will be aligned with the LayerZero OFT standard. This currently includes Arbitrum, Avalanche, Base, Blast, BSC, Fraxtal, Ink, Metis, Mode, Optimism, Polygon, Polygon-zkEVM, Sei, Sonic, and X-Layer. Future chains include Move, Solana, and TON.
2. North Star Hardfork
FRAX (prev. FXS) will become the gas token for Fraxtal, replacing frxETH.
The current FRAX (prev. FXS) contract will change to a WETH-like gas wrapper contract called wFRAX.
Any holders of FXS ERC20s will receive 1:1 wFRAX ERC20 tokens. They can choose to unwrap it for FRAX gas or keep it as an ERC20. Thus, users who hold FXS on Fraxtal will not need to do any action to upgrade their token, the token upgrade will be done for them in the North Star Hardfork.
wfrxETH will become frxETH and will be changed to a normal ERC20. wfrxETH holders will receive 1:1 of frxETH ERC20 tokens.
Because of gas handling / payable-ness in smart contracts, EOAs & Safes will be treated differently than LP/DeFi contracts as follows:
EOAs / Safes: Will receive 1:1 FRAX to frxETH, essentially a free bonus amount of FRAX gas. Because of the high price of frxETH relative to FXS, the total bonus amount airdropped will be negligible. They will also receive 1:1 frxETH ERC20s.
LP / DeFi / Bridge / Other contracts: The market value of the frxETH gas held will be converted to an equal market value of FRAX (prev. FXS) gas tokens. Note that this is a “forced” exchange of frxETH for FXS. Deployers / managers of these contracts MUST ensure that any oracles or other mechanisms of the contract do not become disrupted as a result of this change. External teams are encouraged to reach out to the Frax team before the hardfork to resolve any potential issues beforehand.
Additional misc system contract changes will be made to facilitate an ETH2-like validator system in the future, where instead of ETH, FRAX (prev. FXS) would be staked.
An example table of the proposed conversions is provided below:
3. Upgrade of veFXS to veFRAX & Multi-Token Rewards
veFXS will be renamed to veFRAX, maintaining the same governance power and functionality based on lock times, including farming boosts. Other than the name, the veFXS contract will not change, nor will any positions be unlocked.
Multi-token (additional) rewards will be introduced, with Frax Bonds (FXBs) being the first additional reward token in the system. These will be funded with excess revenue share.
Rewards Distribution:
a. veFRAX stakers will continue to receive FRAX, but based on the tail emission plan now instead of revenue share.
b. veFRAX stakers will additionally receive FXB2029, with governance-approved additions of other FXB maturities or tokens in the future. Amounts will be dependent on governance votes. Emitting additional tokens in the form of bonds instead of other assets encourages long term participation. The FXBs will come from a small portion of the normal DAO / POL revenue, the exact proportion to be determined at a later date. The FXBs distributed this way will be fully collateralized by short-dated tbills of the same maturity purchased via protocol revenue.
c. All rewards will be distributed proportionally based on the lock time and amount of FRAX staked, preserving the current incentive structure.
Airdrops & Ecosystem Rewards: veFRAX stakers, via FXB2029s, will be eligible for airdrops and additional incentives from Frax Finance’s strategic partners and investing protocols. This includes rewards from Frax-integrated DeFi protocols, Fraxtal-native projects, and external collaborations that align with Frax’s long-term objectives. These rewards will complement the multi-token reward system and further enhance the governance token’s utility. The team will have discretion on the exact ratio between how much each token is distributed to veFRAX stakers or held in Frax’s strategic reserve treasury.
FXS Gauges: FXS gauges will continue on the allocated halvening cycles as before. Possible renewal / expansion of the gauge system to Fraxtal is a future discussion item, with a possible source for this from the Community portion of the tail emissions.
4. Clarification of protocol revenue destinations
The protocol earns revenue from various sources. The DAO/POL sources include:
Fraxlend POL interest income, as well as the overall admin fee
Yield from T-Bills / RWAs
Yield from tokenized stables like sUSDe, USDS
BAMM POL and admin fees
Fraxswap POL swap and admin fees
Uniswap V3 POL swap fees
Convex POL farming
frxETH protocol fee
POL sfrxETH
Misc airdrops and grants
Misc sales of volatile tokens
We propose to delineate which income streams go where, as follows.
sfrxUSD: Initially, mainly income from TradFi tokenized assets such as BUIDL and USTB. Later, as more people migrate to frxUSD from Legacy FRAX, the POL income streams described above will be incorporated.
FXBs for veFRAX rewards: A minority portion of the POL income streams described above.
Sustainability: By using FXBs, the fee switch ensures that revenue sharing is long-term and aligned with Frax’s financial stability.
5. Establishment of the Tail Emission Plan & Tokenomics
10% annual FRAX (prev. FXS) emissions. These will drop 0.7% a year over 10 years to a final floor rate of 3%.
[Year 1] token amount are proposed as follows:
25% (2.50M): Frax DAO Includes grants, marketing, partnerships, audits, TWAMM treasury reserves, sponsorships, bug bounties.
12.5% (1.25M): Team incentives+expansion.
22.5% (2.25M): Community: partnerships, liquidity incentives, BD, gauges, boosts for internal Frax projects. Requires community voting.
20% (2M): veFRAX (prev. veFXS): base emissions for stakers
20% (2M): FXTL conversions: Holders can redeem FXTL points for FRAX including boosted earns with staked FRAX
Details & Comparison:
To fairly benchmark Frax’s Tail Emission Plan, we use Total Circulating Supply Inflation as the key comparative metric, as it reflects the actual increase in liquid supply and provides a standardized way to assess inflation impact across protocols. Given that Frax is in its fourth year, we compare it to other projects at the same stage.
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)
-
10%
10%
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.
FRAX emission over 10 years:
Timeline
% New
New Emissions
Total Supply
2024 - 2025
0
0
100,000,000
2025 - 2026
10.00%
10,000,000
110,000,000
2026 - 2027
9.30%
10,230,000
120,230,000
2027 - 2028
8.60%
10,339,780
130,569,780
2028 - 2029
7.90%
10,315,013
140,884,793
2029 - 2030
7.20%
10,143,705
151,028,498
2030 - 2031
6.50%
9,816,852
160,845,350
2031 - 2032
5.80%
9,329,030
170,174,380
2032 - 2033
5.10%
8,678,893
178,853,274
2033 - 2034
4.40%
7,869,544
186,722,818
2034 - 2035
3.70%
6,908,744
193,631,562
2035 - 2036
3.00%
5,808,947
199,440,509
2036+
3.00%
5,983,215…
205,423,724…
FXTL points conversion: We propose starting conversion from a redemption smart contract between FXTL points to FRAX tokens only on Fraxtal chain. 2% of the FXTL points outstanding will be convertible to FRAX tokens per week. For year 1, this is 2M / 52 ≈ 38461.5 FRAX per week.
FXTL Points as Primary Incentives on Fraxtal: FXTL points will continue to serve as the main incentive mechanism for expanding the Fraxtal ecosystem, ensuring robust growth and alignment with protocol objectives. Because points are allocated in different amounts for different activities and will be expanded over time to include a growing ecosystem of projects and builders on the Fraxtal chain.
Flox Capacitor (floxCAP) Boost Mechanism:
Lock FRAX (prev.FXS) into a FRAX staking contract to multiply the amount of weekly tokens up for conversion that you would normally be entitled to without the boost. You can withdraw your FRAX from this contract any time based on a fixed cooldown period of 90 days.
In order to receive the boost, you will have to maintain a certain threshold floxCAP balance relative to your entitled FRAX token conversion amount that week, otherwise you will be able to convert your points to the normal baseline amount. If you choose to not stake FRAX for the floxCAP boost, you can still earn tokens at the baseline conversion amount.
The formula for calculating this threshold ratio will be determined at a later time, but is expected to depend on multiple factors, including the total FXTL emitted for all users for that week, as well as the total amount of floxCAP boost held by other users “Cappers.”
Withdrawing your floxCAP back into FRAX (prev. FXS) will be a fixed staking+cooldown system of 90 days.
floxCAP is non-transferable. floxCap is a balance signifying boosting power of a user’s wallet/address.
This system will reward long-term oriented users without imposing exceedingly long locking periods. It will also reduce FRAX (prev. FXS) selling from points conversions since getting the best conversion rate requires owning+staking FRAX for at least the next 90 days.
6. Frax Burn Engine (FBE)
The FBE is a system on the Fraxtal blockchain that burns Frax tokens sent to it. Contracts sending Frax to the FBE as a source of FRAX token burns currently are:
More contracts will be added as infrastructure is built in the Frax ecosystem. Projects that wish to contribute to the FBE can send Frax to the FBE. To add your contract to the FBE infrastructure list submit a pull request on Frax’s Fraxtal chain repository. The FBE is the primary burn system of the Frax ecosystem and should outweigh emissions in the future as burn activity ramps up due to growth and emissions continue to decay.
Voting
For: Approve the Frax North Star Hardfork, Tail Emission Plan, Flox Capacitor, and FXS Upgrade
First of all, I want to acknowledge the tremendous effort behind this proposal. It’s clear that there’s a strong vision for the evolution of the Frax ecosystem, and I believe many of us share the view that these changes could be a turning point for the protocol’s growth and long-term sustainability.
That being said, there are two key points that concern me and that I believe would be valuable to discuss to ensure the proposal benefits the community as a whole in the long run.
1. Fairer Distribution of Emissions in the First Year
Under the current proposal, the allocation of FRAX (formerly FXS) in the first year doesn’t fully reflect the value contributed by the most committed users. Specifically, those who accumulated FXTL believing in the potential of the Flox mechanism and helped attract TVL to Fraxtal are receiving a relatively small share compared to other allocations.
To address this, I propose allocating 5% of the first-year emissions exclusively to FXTL holders, as they have demonstrated their commitment and trust in the protocol from the beginning.
Additionally, veFRAX (formerly veFXS) holders have been somewhat sidelined in the FXTL distribution, despite locking their tokens for years and aligning their interests with Frax’s long-term growth. To balance this, I believe another 5% should be directed to them.
This adjustment would create a fairer emission distribution and properly reward those who have directly contributed to the protocol’s success.
2. Lack of a Clear Model for Long-Term Deflation
It has also been discussed in publications that Frax will become deflationary in the future through token burns and protocol revenue. However, there is no mathematical model to support this assumption.
I believe it would be highly beneficial to include an estimation based on:
The expected revenue from each protocol application (Fraxlend, T-Bills, BAMM, Convex POL, frxETH fees, Uniswap V3 fees, etc.).
The projected volume on Fraxtal and the impact of gas fees.
A comparison between emissions and burn mechanisms over time.
This doesn’t need to be an overly complex model, but having a framework to illustrate how emissions are expected to be offset by burns and protocol growth over the years would provide more confidence to the community and further strengthen the proposal.
I think this is a exciting proposal to which I mostly agree. But I have some comments that I want the team to consider.
Make the obscure obvious. I think you use too few words to defend the inflation of the supply of Frax. The reason behind it, and fostering the growth of Frax is important to highlight. It is key that Frax manages to grow the pie, and therefore increased inflation can be defended. I wish you put more emphasis on that. I also agree with @FraxGod.eth when he say we should have a simplified model for deflation. 3 models with three revenues to see how FBE would offset inflation based on revenue.
Deprecate Gauges and/or merge it into FXTL points. Gauges is due for a clean-up. It is bloated and in-effective, and having it as a extra system on top of FXTL points seems unnecessary complicated. Create a new system where users and protocols can direct FXTL rewards with their veFRAX and set aside a percentage of the FXTL points for this purpose. My suggestion for a system is: Make it so that any Fraxtal pair, or Frax asset (in a pair, on any chain) can be incentivised. Remove the whitelist so any pair can be added, and make each vote for a FXTL point incentive only last 3 months, and has to be locked for that period to that pair.
All protocol incentives should be in the form of FXTL points. With Layer 0, it should also be possible to use FXTL points as incentives for other chains if it is transferable (or maybe a function where it can only interact with L0). If Fraxtal is the only place to redeem it, it might lead to more people onboarded to Fraxtal.
I’ve been looking through the proposal and wanted to share some thoughts - both on what I think might be missing and some ideas for streamlining things:
Protocol Income & Burning Mechanics So I remember about 1-2 months ago on Telegram, there was talk about how the Frax protocol’s current income could support burning FRAX at 4x the current rate. Could we get some updated numbers on this? It would really help us understand the trade-off between any new dilution and potential burning power. Also, I think we need more granular data on our Fraxtal pools - specifically what kind of TVL and burn rates we’re actually getting for each pool we’re voting/bribing for.
Token Strategy Optimization Here’s something I’ve been thinking about: We removed FPIS to make things simpler, but now we’re running with both FXTL and FRAX as emission tokens. Having two tokens isn’t necessarily a problem, but using both for emissions kind of is. Why not just emit FXTL and focus on making the FXTL → FRAX conversion path really solid? This would give us a much cleaner flow: people farm → get FXTL → convert to FRAX → lock into veFRAX.
Inflation Management & FXB Approach I get what the Frax foundation/DAO is trying to do, but I think we can achieve it without ongoing inflation. What if we did a one-time max-lock inflation and then used FXB (earned over time) for distributions? This way, people receiving tokens aren’t forced to sell at specific times - they can sell bonds when they actually need to, since they’re way less volatile. At this stage in the project, I don’t think we need base inflation - we can drive veFRAX locking demand through FXB and other assets.
Frax Burning Engine Refinements I really like what Sam mentioned in Telegram about using some of the burned FRAX for the security budget (FXTL emissions). It’s a great idea - might even be worth starting at 100%. But I think we should set up clear milestones for reducing the recycling ratio over time. Like, when FrxUSD hits 1B supply, we reduce by 10%, or when FrxETH hits 1M ETH, another 10% reduction. This would help everyone understand what we’re working toward and make it easier for new people to trust the project’s direction.
User Experience & Accessibility Look, we’ve got some really cool stuff, but it’s pretty advanced for newcomers. We need more clear entry points where we can gradually bring people in. FrxUSD → sFrxUSD is one great path, and FrxETH → sFrxETH is another. Our token distribution should follow this same pattern - make it easy for people to get started, then they can naturally progress into things like FraxLend, BAMM, etc. as they learn more.
Overall, I think we’re heading in the right direction, but this proposal feels like it’s adding more unknowns when we should be working to reduce them. What we need is more clarity and better defined pathways for both new and existing users so we can prove to everyone that all roads lead to frax.
@sigmund.frax , @0xzert, We believe that we have included both locked FPIS, and veFXS on Fraxtal in our airdrop list which we passed to SwapX team. if you think its not the case please contact me on Telegram (my handle is @naderghazvini) and send your address so we can investigate and hopefully fix it.
Team incentives should be linked to frxUSD TVL growth. First milestone 1B TVL.
proposal doesn’t simplify an already complex frax ecosystem, it indeed confuses. Get rid of fxtl points (one time conversion) and only use Frax (formerly FXS).
inflation numbers are indeed not motivated. Allocations over the different buckets neither.
Allocation buckets should not be intra ecosystem capital rotation and wealth redistribution, not adding
value.
I support strong team incentives if going forward they are linked to adoption metrics. We can do technical and tokenomics magic all we want, without strong adoption fast we will be surpassed even more by others.
1: Poor inflation ratio, the project gas consumption cannot perfectly cover inflation, which will only hurt long-term vefxs stakers
2: Please give vefxs a 90-day exit mechanism, because the team is hurting vefxs long-term stakers
3: The economic model is not transparent, and the role of annual inflation redistribution to the number of teams is not clearly stated
4: Similar to ETH2’s pledge, is it allowed for vefxs to also be converted to the pledge to participate in the security and stability of the chain?
Hi @amirnader - I can’t seem to add you to my Telegram. Thanks for responding. My FNS name is sigmund.frax which links to my wallet address. Apologies for clogging up the North Star chat.
Check the community vibes in telegram.
People are pretty much against the proposal.
Inflation: It was mentioned to be single digit inflation yet turns out to be 10% per year and ultimately we 2x total supply in ten years. And most of the inflation was allocated towards grants, team incentives, partnerships, leaving very little to frax holders. How come could you expect the community to support and love this? How would you expect new buying demand comes in on FXS?
Only dilution no emphasize of buy backs. Do you really expect network fees, FNS register fee buy backs matter and able to outsize the inflation? Aren’t majority of protocol revenues supposed to be supporting buy backs?
If there isn’t a growth story and strong value accruel to FXS, no one is willing to come in and buy FXS, nor stake veFXS.
What the team should do:
Significantly lower down inflation to less than 5% and allocate most of them to frax holders , and instead of 10 year, we should do 5 year plan.
protoocl revenue to buy back fxs, some revenue can be used to boost frxUSD, but most should go to FXS
majority of the new emissions should be allocated back to fxs holders, because the team want to use a portion of the protocol revenue to subsidize frxUSD, so the emission is like a compensation to that.
even if protocol revenue are to be used to incentivize our stablecoin holders, majority of the revenue should still be used to token buybacks
for those token got bought back, allocate a small percentage to team etc, team portion should not come from direct emission, yet should come from those fxs tokens that goy bought back from protocol revenue
I agree with the proposal, but the inflation rate must be reduced because its going to impact veFRAX holders. Have you considered the option to remove FXTL and only use FRAX for everything?
I think it would be good to set a specific revenue share percentage for sfrxUSD. I’d recommend we start with 98% of the corresponding frxUSD’s revenue, with 1% going to an insurance fund, and 1% going to Frax.
I think we should make drastic changes to how FXTL points are distributed. I think the VAST majority of them should be related to gas usage. Right now basically all incentives are based on holding assets that aren’t necessarily tied to frax positive outcomes. Specifically, I’d like to see all the FXTL incentives linked to holding FXBs to be removed and replaced by generous FXTL incentives for minting additional FXBs. I’d also like to limit the FXTL subsidized buybacks to 2x Fraxtal revenue.
I’m not opposed to FRAX inflation, the protocol is clearing in need of cash and I’d 100% support a OTC trade of FRAX that guarantees us CR>=100. I am opposed to the 20% allocation to veFRAX stakers, it seems like needless inflation. veFRAX yield should be exclusively tied to Frax profitability.
I’m opposed to the Flox Capacitor, I think adding it just further complicates an already complicated protocol. I’ve been very pleased with the recent steps taken to simplify the user interface but believe this would a step back.
Alongside the transition to frxUSD, I’d like to propose that we allocate 50% of frxUSD revenue towards subsiding frxUSD base-pairs on all chains. Allocations should be given out to pairs based solely on their average frxUSD balances. I think that this would give us a huge advantage in gaining base-lp market share which is IMO the most important metric for a stablecoin.
First, thank you to the team for all the time and effort it into this proposal. I like the overall direction and am looking forward to a productive and high fidelity conversation. Some random thoughts…
Re: “veFRAX stakers will additionally receive FXB2029, with governance-approved additions of other FXB maturities or tokens in the future”… Will this be via wFXBs? Is it possible to make this system a bit more dynamic and reflexive? It feels like loading up the ecosystem with one type of bond, regardless of market conditions, might not be the best long-term. I still feel these should be wFXBs with the specific FXBs determined by Frax and Convex.
I’m okay with the inflation. Hopefully Frax grows a lot more than 2x over the next 10-years. I would like to see some models on that show token growth with burn under a few scenarios (conservative, expected, bullish) and some more reasoning on why 10% decreasing to 3% is the right inflation.
I don’t I like the system for fxtl->frax conversion. I’m worried about runs on the migration contract. I think something like Frax Beluga proposed with a direct conversation with the ratio based on how long you lock is better.
It feels like this ignores long-term stakers. I get the ultimate goal is doing what’s best for the long-term protocol, but it feels like people who have been here for a while and are still in the red should at least get something for their continued support though tough times. Maybe an initial fxtl->fxs conversation ratio that’s better for the first month so people who have been with fraxtal since the beginning get a little more for locking frax for the initial airdrop.
I don’t like the floxcapacitor system. I think it adds complexity by adding another gauge people have to lock. Just have the Flox boost be for locking frax for up to 90 days in the regular vefrax locks. If you lock for longer, you get all the additional vefrax benefits plus a maxed-out flox boost.
My comment to the FXB system is that it is designed in a bad way for the future continuance. It should have been a rolling duration change from the beginning. Updating yearly. Example 2025, FXB2029 is given as a reward base. 2026, FXB2030 is given as a base reward.
Also make it so that people can choose to get longer duration FXBs 2055 for example, in return for a some what higher reward (in USD terms). Those are the most profitable for the protocol.
I also agree with you regarding the Flox Capacitator system. The system makes sense in that we want users more reasons to lock Frax (FXS), however it could just be built into the veFRAX (veFXS) system with a neat UI and information on the FXTL points redeem page.
veFRAX SHOULD HAVE A RAGEQUIT FUNCTION ADDED. 20% FEE. BURN THE FEE.
Please avoid the inflation of FXS/FRAX. It is morally wrong (just think of our long-term holders) and will destroy trust in the project and value of the FXS/FRAX token.
I recommend a different approach: skip inflation and rewards of veFRAX holders with FRAX/FXS. Instead, redirect most of the Protocol net income to veFRAX holders in the form of wFXB or frxUSD.
Buy FRAX of the market (with protocol income) for conversion of FXTL points.
sfrxUSD needs to have a separate income, should not be mixed up with veFRAX income. e.g. only from RWA and Frax lend.
I sincerely appreciate the continuous development of Frax and the long-term vision behind this proposal. The introduction of the Frax North Star Hardfork, Tail Emission Plan, and Flox Capacitor Boost are significant steps in strengthening the ecosystem and further decentralizing its governance.
However, I believe that FXTL points should be given greater value in the conversion process. The proposed allocation for FXTL-to-FRAX conversion appears to be too limited, benefiting only the top 20 or 30 holders out of 800, while leaving many others with little to no meaningful reward. This is particularly concerning given that a large number of FXTL holders earned their points through veFXS holdings at the time of FXTL’s introduction.
Additionally, I believe that in the first year, a larger portion of the new FRAX emissions should be allocated to FXTL holders for conversion. This would ensure a fairer transition, properly rewarding early supporters and encouraging broader participation in the ecosystem. Expanding the redemption rate or adjusting the allocation mechanism could improve fairness and better recognize the contributions of FXTL holders.
I’ve already communicated a lot of thoughts to Sam directly but posting here as well.
A) vefrax getting emissions is a very bad idea. emissions are for financing and vefrax getting a portion of them is just unnecessary dilution.
B) floxcap staking in general is fine but it should NOT be the standalone way to get fxtl boost. veFrax should obviously get to participate in this boost process too. If you lock in vefrax you would lose on farm boosts. Give the boost to veFrax as well (and should probably be even higher boost to reflect the longer lock)
C) if fxtl remains nontransferable, then there needs to be a delegation boost system for the fxtl boost (which should made available to vefrax). if not then only eoa lockers would have the flexibility to farm and boost and not contracts handle locking but not farming. aka any integration would be pushed out.
D) Mainnet gauges should probably not be resurrected. The lock boost is a bad UX but it had an objective to guard against a bank run. however frxusd should at its core be protected against this so this is not necessary anymore. Also most guages are FRAX and not frxUSD so cant migrate those tokens. There’s also now FXTL farming so you would have two different farm systems and gets all confusing. Can sunset the mainnet FXS guage system and just focus on FXTL farming.
E) Section 4 on income doesnt really make sense. I get the first list but not sure whats trying to be said in the second section. just raises more questions heh
F) if vefrax and mainnet guage emissions are cut, can increase the allocation toward FXTL, which sounds a bit weak right now to be honest.
G) Lastly more of just thinking outloud here but wondering what would happen if fxtl conversion was set at a slightly higher rate. 2% could be slow to flush out old fxtl meanwhile new fxtl is always being minted. fxtl emission rate isnt constant so not really sure but just curious if this was set slightly higher if it would make fxtl farming ux a bit easier as newer fxtl farmed can end up being worth a bigger cut of the emissions which makes new user entry better. maybe? kind of just curious here
I’ll be honest, i was conservative on expectations. Was expecting something like an 1/10000 FXB conversion for FXTL or at worst 4y locked veFXS with a similar ratio on dollar value. Somehow this proposal manages to drop the bar lower. Got something like 300m fxtl while taking a huge hit on FXB’s thru summer, thinking the FXTL conversion would somehow balance it. This proposal just forces me attend a whole new race to get slice of a comically smol pie, all while getting diluted magnitudes faster given now FXTL is the main incentive. I dont think i have the willingness to attend anymore.
