Vote for FRAXBP-USX on Saddle Finance

Summary

Seeking support from the Frax community to vote for FRAXBP-USX on Saddle.Finance to get $SDL emission toward it.

Background

dForce provides a complete set of DeFi protocols covering assets, lending, trading across multiple blockchains including Ethereum, BSC, Arbitrum, Optimism, Polygon, Avalanche, KAVA, Evmos (coming soon), etc. Same as Frax, dForce was invested by Multicoin Capital, as well as CMBI and Huobi Capital.

dForce has already supported the lending and borrowing of $FRAX on dForce Lending (audited by Trail of Bits, ConsenSys Diligence, CertiK, and Certora) on multiple blockchains. The soon-to-be-launched dForce Trade is also going to support the trading of $FRAX by aggregating liquidity across different DEXes with the most favorable price.

USX is an USD soft-pegged stablecoin launched by dForce. It has a total circulating supply of $141m across Ethereum, Arbitrum, Polygon, Avalanche, Optimism, BSC, Evmos, and KAVA.

dForce has recently launched a FRAXBP-USX pool on Saddle.Finance.

Understanding that Frax has deployed a significant amount of POL to power FRAX paired pools on Saddle Finance and has become a crucial holder of veSDL, we’d like to seek support from the Frax community to vote for FRAXBP-USX in order to get SDL emission toward it. Vote through Snapshot.

Introduction to USX

Minting & Redeeming

  • Pool-based model: users can mint USX against multiple types of collateral assets through lending protocols integrated with USX, where a range-bound interest rate policy will be implemented to ensure the most competitive rates for borrowers.

  • Vault-based model: further expand the collateral type of USX to a broader range of collateral assets including LP tokens, yield tokens, etc. Each collateral asset will be housed in an isolated pool with customized risk parameters and fixed interest rates.

  • Liquid stability reserve (LSR): users can mint/redeem USX against/for supported stablecoins at 1:1 exchange rate and zero swap fee. Each collateral asset carries a minting cap to back the issuance of USX. LSR is currently supported on BSC, Polygon, and Optimism.

Price Stability

USX is designed to maintain a 1:1 soft peg with the U.S. dollar. Its pegging mechanism is mainly dictated by the hybrid interest rate policy, as well as the liquid stability reserve module:

  • Range-bound interest rate: USX implements a dynamic supply mechanism powered by the liquidity module. When the market demand for USX is high, more USX liquidity will be supplied to lending protocols to ensure the borrowing rate stays competitive, and vice versa.

  • Fixed interest rate: in the event of a depeg, DF holders can collectively adjust the interest rate for Vaults through governance to help USX stay on the price target.

  • Liquid stability reserve: zero slippage and zero fee will unlock a significant source of price stability driven by market arbitrage. Users can buy USX when the price is below $1 and sell USX when the price is above $1 to make a profit.

Liquidity Modules (similar to Frax’s AMO)

  • PDLP: PDLP is short for Protocol-Direct-Liquidity-Provision and is designed to combat USX’s liquidity shortage on secondary venues. It allows the protocol to use USX’s deposit certificates from supported lending protocols, cross-chain bridges, and stable swaps as collateral to mint USX and supply the liquidity directly to satisfy the market demand.

  • POO: POO (Protocol-Owned Operator) is an improved version of PCV (Protocol-Controlled-Value), leveraging treasury assets to mint USX, exchange them for the relevant paired asset or pair them with the relevant assets, gradually acquiring and controlling most of USX’s liquidity in the open market.

Multichain Implementation

USX can be minted natively on all deployed chains and is implemented with cross-chain-enabled liquidity capability, allowing users to move USX across supported chains with zero slippage and minimized liquidity cap (only subject to USX’s liquidity on destination chain).

Decentralization

USX is 100% decentralized with DF holders governing the protocol, including but not limited to parameter setting, liquidity operation, onboarding of new collaterals, new feature implementation, etc.

Security

The USX protocol has undergone extensive code reviews and security audits by Trail of Bits, ConsenSys Diligence, CertiK, Certora (formal verification), with a bug bounty launched through Immunefi. dForce has withstood a number of market downturn and are battle-tested with more than three years of operation on-chain.

Benefits for Frax Community

  • LP of FRAXBP-USX can earn SDL emission on Saddle.
  • USX is powered by liquidity modules and will seed liquidity to ensure market depth and capture a significant portion of USX trading, generating trading fees for LPs.
  • Both dForce and Frax are multi-chain protocols implemented on Ethereum, Arbitrum, Polygon, Avalanche, Optimism, BSC, Evmos, making it easier to expand our lending support to FRAX on different blockchains. We believe the two communities will benefit from more exposures through a fitting and long-term partnership.

Proposal

  • For - Vote for FRAXBP-USX on Saddle.Finance in order to get SDL emission toward it.
  • Against - Do nothing.

0 voters

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