FRAX <> RAI Curve Base Pool

Overview

FRAX is currently accumulating RAI in its treasury and deploying it in Uniswap v3. There is a better way to use this RAI in combination with FRAX with the help of a FRAX<>RAI co-incentivized Curve pool.

Abstract

FRAX has been using Curve and Convex extensively over the last months and has also been diversifying the underlying collateral held by the protocol. Recently, FRAX started to accumulate RAI in its treasury and deploy it in a Uniswap v3 FRAX<>RAI pool.

We (the Reflexer team) believe there is a better way for FRAX to achieve multiple goals at once, namely:

  • Further deepen FRAX liquidity
  • Accumulate even more CRV and/or CVX in treasury
  • Diversify the collateral base even more using RAI
  • Accrue more RAI<>FRAX trading fees that flow back in the treasury

The solution is rather simple: build a custom FRAX<>RAI Curve base pool, either on Ethereum L1 or Arbitrum, and co-incentivize it together with the Reflexer community. The Reflexer community is already hard at work building a Curve base pool that can accomodate RAI’s floating target price.

Implementation

Reflexer is open to incentivize a FRAX<>RAI Curve base pool with up to 20 FLX per day, assuming the FRAX community would be open to match these incentives. There are two ways this could happen:

  • Create a Curve base pool on L1 and incentivize the community to allocate CRV emissions to it
  • Create a Curve base pool on a L2 solution such as Arbitrum and directly incentivize it with FXS and FLX in order to build up liquidity

Reflexer is open to both options, with a slight preference toward the former. In both options, FRAX can deploy its RAI treasury in the Curve pool and deepen liquidity, as well as make the collaboration between the two projects even stronger.

8 Likes

incentivizing a FRAX - RAI pool on curve L1 is a no brainer

1 Like

Posted a proposal on the Curve forum about the FRAX/RAI base pool:

The Reflexer community already built a base pool that can accomodate FRAX & RAI but now we need to see the situation with audits. After that the pool and a gauge can be deployed anytime.

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Great idea.
I think this will strengthen collaboration and protocol strength for both RAI & FRAX.