FRAX x Arable Protocol

Purpose

This proposal’s purpose is to approve the funding of $100K FRAX into an unbalanced FRAX/arUSD liquidity pool in partnership with Arable Protocol. In partnership with this approval, the Arable Protocol will provide arUSD liquidity to complete the pool and enable FRAX and FPIS as collateral, enabling FRAX/FPIS holders the ability to mint arUSD.

Summary

Arable Protocol proposes:

  • The creation and funding of an unbalanced FRAX/arUSD pool based on Arable’s swap contract.
  • To integrate FRAX and FPIS assets as supported collateral at Arable Protocol.

As a good faith partnership action, there will be an ACRE airdrop to all FXS holders who votes on this proposal if this vote passes.

Background

Arable Protocol is reshaping the DeFi space. Our goal is to make multi-chain farming simple, economical, and available to all. With a simple yet powerful user interface, both experienced and new farmers can effortlessly stake yield farms from various chains. Arable allows for multi-chain yield farming on a single platform and chain without leaving the App. With ever rising gas prices and bridging fees reducing revenues, it’s time for a revolution!

Arable Protocol is based around a synthetic ecosystem and its liquidity is created through the minting of the stable asset arUSD. Utilizing arUSD, users can swap between a variety of synthetic cryptocurrencies and LP tokens and farm on synthetic yield farms that track the APR of their native chain counterparts. Collateral is required to back minted arUSD in an over-collateralized fashion. We propose to add FRAX and FPIS as collateral options to Arable’s current collateral options, including USDT, WAVAX and Arable’s own governance token, ACRE. To find out more, please refer to https://medium.com/@ArableProtocol/35e2c39a0c87.

To incentivize the utilization of FRAX as collateral, we propose the creation and funding of an unbalanced (no slippage or impermanent loss) FRAX/arUSD pool based on Arable’s swap contract. The Frax protocol will add a one-sided deposit of $100k FRAX, which will be matched with $100k arUSD by the Arable Protocol for a total liquidity of $200k.

Rationale

  1. Increasing volume and liquidity for both protocols. By supporting FRAX and FPIS as additional collateral options by Arable Protocol and the creation of a FRAX/arUSD liquidity pool, such a partnership would result in increased liquidity for and visibility of our respective protocols.
  2. Arable Protocol and the Frax Finance community have strongly aligned interests and will benefit from more exposure to each other’s communities.
  3. Exploration of further co-marketing opportunities will lead to increased visibility of each other’s communities and user bases.
  4. Building trust through partnership. By developing a long-term partnership, we can build trust with each other by ensuring fair and level compensation between the two protocols.

If you would like to find out more about what we build and envision, check out our Medium, Linktree or get in touch with us on Telegram, Discord, and Twitter. Do note that every one who votes on this proposal gets an ACRE airdrop if this vote passes!

Thank you.

1 Like

can we have a rough idea of the balance of this pool please

it seems odd that you would use FPIS, i think it would make more sense to use FRAX and FPI as they are the stable coins.

buying votes direct on a proposal seems bit odd, but i guess its no different from offering a bribe for votes on a different platform.

1 Like

Just a small noob question: how do i find this proposal to vote ? i see no link and no number to find it on https://app.frax.finance/
cheers

Hi @sparkes25 , nice to meet you! So the proposed FRAX/arUSD pool is unbalanced, which means that you can deposit either FRAX or arUSD and swaps are always 1:1 with no slippage. If either tokens has insufficient amounts in the pool, only swaps in one direction are possible. As per our proposal we want to create a pool with $100K of FRAX and $100K of arUSD for a total of $200K. We will create a similar pool for USDT/arUSD, for more details this article covers it.

Just like how we allow USDT (stable) and WAVAX (volatile) as collateral, we are trying to allow as much as the Frax Protocol ecosystem offers, hence, allowing FRAX (stable) and FPIS (volatile) as collateral as well. With that said, we may enable FPI as collateral too.

We like to reward the community for their engagement.

Hi @Simon_CryptoCrew_Val , nice to meet you! It will be moved to Snapshot by the Frax Protocol team for voting if there is enough discussion, so there is no voting on this proposal just yet. Feel free to ask questions and I will be happy to answer them

1 Like

its not up for vote yet

Its unlikely the community will see any value in the airdrop as it would not be worth claiming the airdrop due to the ETH fees ,unless your planning on dropping a few $m.

A better way would be to send FRAX protocol all the tokens you would have used in an airdrop. then the protocol can slowly sell them for FXS and add them to the normal veFXS rewards.

I still dont understand why there is a need to create a new stable coin.

I also dont understand this, who are the “liquidators” and why is liquidation done manually ?

Why would the protocol issue a penalty for a liquidation ? this seems to have no purpose.

this seems like and odd thing to say, most protocols will try to make farmers more secure by doing audits and having security checks on the contracts. but you seem to be saying that farmers should pay out for insurance.

do you have the link to your whitepaper or audits, i cant find them on your app

One of the reasons is that we are trying to bootstrap for Ethereum network users by holding ACRE on Ethereum network since we are trying to have our Bancor liquidity setup.

We are having a new stable coin as it is needed to act as a base currency for our synthetic farming / trading. For example, you are farming arBNB-arCAKE and the rewards are in arCAKE, you are not able to withdraw that arCAKE into CAKE but what you can do is sell your arCAKE for arUSD to realize your profits. And if you look at other synthetic related projects, they all have their own stable coins. Therefore, it is required for us to do so.

Liquidators would not be liquidating manually because we have built liquidation script so that validators can monitor liquidatable positions in real time.

Think of it as a grace period to fully collateralize their accounts as the liquidation penalty period is to give time for collateral providers to have time to make the account healthy during the penalty time - 3 days period.

Yes, we have already done our audits with Solidity Finance and you may check it here, here or here

As for our litepaper, feel free to have a look here

i dont think this will have the effect you are hoping for unless your doing a massive airdrop.

the most likely outcome would be lots of people moaning because they got an airdrop thats not worth claiming because its less then the fees.

imo it would be better to give it to FRAX protocol with some form of vesting time as its far less likely they will just dump it and move on.

why cant you just sell it for FRAX and use FRAX to realize your profits?

i have seen that, but where is the full whitepaper?

Sure, I’ll let the devs know.

Like I mentioned previously, arUSD is used as a base currency for users to swap between the various synthetic assets available on Arable. You can swap your arUSD to FRAX if you want, if this vote passes and we have an unbalanced pool between FRAX and arUSD.

There isn’t a whitepaper yet, just the litepaper at the moment. We are working on the whitepaper.

yes, i hear you say that people can swap for arUSD.

but i see no reason why this cant be changed and just use FRAX and not bother with arUSD in the first place.

i see no reason to create another coin when there are many stable coins already.

why is this ? when is the full white paper expected to be released? will it be released before this proposal goes to vote?

arUSD is minted against our collateral pool and it’s different from other stable coins.

We have been busy with the MVP launch so we put our focus there and will get to the whitepaper when we do have the time