FXS Price Poised For Uptrend As Frax Finance Unveils Roadmap To Reach $100B TVL
March 22 2024 - 3:00PM
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Frax Finance, a decentralized finance (DeFi) protocol, recently
unveiled its Singularity Roadmap. It aims to propel the total value
locked (TVL) of its layer 2 blockchain, Fraxtal, to $100 billion by
the end of 2026. This notable surge would represent a 760,000%
increase from the current TVL levels, which stand at $13
million. Frax Finance Singularity Roadmap According to the
protocol’s announcement, Fraxtal, the substrate that powers the
Frax ecosystem, serves as Frax Finance’s operating system. With the
launch of Fraxtal and achieving an effective 100% Collateralization
Ratio (CR), Frax Finance claims to have consolidated its core
product offerings. Related Reading: Bitcoin Spot ETFs See 4
Consecutive Days Of Outflows, Here’s What Happened Last Time To
reach the ambitious $100 billion TVL goal, the protocol has
announced that it has already generated over $45 million, reaching
the coveted 100% CR. As announced, with this milestone
achieved, the FRAX stablecoin, which has remained relatively
dormant during the process, and the FXS revenue share, which has
been temporarily reduced by 90% to conserve assets, can now undergo
a “transformative change.” In addition, the upcoming
introduction of Layer 3s (L3s) on Fraxtal is expected to be a key
factor in further contributing to the growth and adoption of the
protocol. Fraxtal, which is built on the Optimism (OP) network,
stands out as one of the most widely used layer 2 solutions on top
of Ethereum (ETH), according to the protocol. The Frax team says it
has developed its underlying incentives to provide a seamless
experience for developers and users, further encouraging
adoption. In particular, by owning the entire stack, Frax can
introduce advanced features such as account abstraction, new
precompiles, privacy features, aggregated decentralized
applications (dApps), and interoperability with Superchain.
The protocol believes these features will enhance the on-chain
experience, making Fraxtal the “preferred” platform for holding,
staking, and transferring crypto assets. Expansion Strategy The
proposal also unveils Frax Finance’s plan to establish 23 Layer 3s
within 365 days, kicking off the “Fraxtal Nation” community. By
supporting these 23 chains with developer access, incentives, and
investment, Frax aims to foster a positive-sum approach and provide
additional support to official partners. The protocol also
suggests that these partners will receive “substantial allocations”
of FXTL points, aiming to solidify the role of the FXS token as the
ultimate beneficiary of the Frax ecosystem. Moreover, Frax Finance
founder Sam Kazemian intends to allocate 50% of the revenue from
protocol fees to veFXS token holders. In comparison, the remaining
50% will be used to acquire FXS and other Frax assets for pairing
in the FXS Liquidity Engine (FLE). This initiative will increase
liquidity, strengthen the Frax balance sheet, and provide
additional incentives for the protocol’s stakeholders. Related
Reading: Stablecoins Steal The Spotlight: $150 Billion Market Cap,
$122 Billion Daily Trades Frax Finance’s proposal also seeks to
reactivate the protocol fee switch, which was temporarily turned
off during the consolidation phase of the protocol. By
reigniting this switch, a portion of the yield generated from
protocol fees will be directed toward veFXS token holders. veFXS,
or veiled FXS, represents a locked version of the native token,
FXS, and offers enhanced voting power and participation in the Frax
ecosystem. As of the time of writing, FXS has not responded
favorably to the news. Its current trading price is $6.93,
reflecting a 3.5% loss in the past 24 hours. It is important to
note that the proposed protocol features are still in development,
and the impact on the Frax Finance ecosystem and the token’s
performance is yet to be determined. Featured image from
Shutterstock, chart from TradingView.com
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