[ARFC] Add FRAX Arbitrum Aave v3

Governance
1

Title: [ARFC] Add FRAX Arbitrum Aave v3

Author: @fig - Flipside Crypto, @TokenLogic - TokenLogic

Date: 05-26-2023

References

Website: https://frax.finance/
Whitepaper: https://docs.frax.finance/overview
Documents: https://docs.frax.finance/
Analytics: https://facts.frax.finance/
Github: frax.finance · GitHub

Arbitrum Contract Address: Abritrum: 0x17FC002b466eEc40DaE837Fc4bE5c67993ddBd6F

Oracle Address: Arbitrum: 0x0809E3d38d1B4214958faf06D8b1B1a2b73f2ab8

Audits

Summary

This publication presents the community an opportunity to add FRAX to the Arbitrum v3 Liquidity Pool.

Motivation

FRAX can use its Lending AMO (similar to Maker’s DAI Direct Deposit Module) to mint protocol controlled FRAX to be lent out on Aave Protocol. Frax Finance has in the past done so in Aave v2 on Ethereum and has already stated on the Aave governance forum an interest in doing so on other deployments once FRAX is added.

The Frax Finance team could deploy a similar Aave Lending AMOs to Aave v3 after FRAX is listed.This will provide Aave users with access to FRAX and present an alternative to the four USD stable coins on Aave v3.

Users are able to borrow FRAX and earn yield across DeFi, such as on Curve Finance and Convex Finance.

Specification

1. What is the link between the author of the AIP and the Asset ?

There is no link between the authors and the core teams of the asset.

2. Provide a brief high-level overview of the project and the token ?

See summary.

3. How is the FRAX token currently used ?

FRAX is a popular stablecoin to borrow, with its Lending AMO it is able to mint protocol-owned FRAX to ensure low interest rates.

4. Emission schedule

FRAX is a stablecoin and mintable/redeemable so it does not have a governance token emission schedule.

5. Token (& Protocol) permissions (minting) and upgradability. Is there a multisig? What can it do? Who are the signers?

There is a multisig which can operate certain AMO contracts but cannot in any way change users’ FRAX balances, cannot freeze or pause any user’s funds, and cannot in any way alter the behavior of the protocol or sweep/rug collateral or value. There are no FRAX whitelists/blacklists in any capacity as it is entirely a bearer asset/decentralized similar to DAI.

6. Market data (Market Cap, 24h Volume, Volatility, Exchanges, Maturity)

Arbtirum

Market Cap: ~$22,425,936.51
24h Volume: ~$50M

Volatility: stablecoin (low)
Exchanges:
Arbitrum Launch Date: 27/09/2021

Date of deployment: Dec 20th, 2020
Number of crosschain token holders: 25,000+

The protocol currently holds over $1,004,053,174.00 in TVL across all chains

7. Social channels data (Size of communities, activity on Github)

8. Contracts date of deployments, number of transactions, number of holders for tokens

Supply: 22,425,936.51
Holders: 9,383
Transfers: 427,627

Please see the following post for more details: [ARFC] Add FRAX to Aave V3 Ethereum

Risk Analysis

Parameter Value
Isolation Mode Yes
Borrowable Yes
Collateral Enabled Yes
Supply Cap 7.5M
Borrow Cap 2.5M
LTV 67.00%
LT 74.00%
Liquidation Bonus 7.50%
Liquidation Protocol Fee 10.00%
Reserve Factor 15.00%
Variable Base 0.00%
Variable Slope 1 7.00%
Variable Slope 2 300.00%
Uoptimal 45.00%
Stable Borrowing Disabled
Stable Slope 1 7.00%
Stable Slope 2 300.00%
Base Stable Rate Offset 2.00%
Stable Rate Excess Offset 5.00%
Optimal Stable to Total Debt Ratio 20.00%

Disclaimer

The information provided above about FRAX is from public sources and Flipside Crypto cannot guarantee that it is or will stay accurate.

FRAX has not compensated Flipside nor Token Logic to create this proposal and we are doing this because we believe that the listing would be in the best interest of the Aave.

This ARFC has been prepared solely to receive community feedback.

Copyright

Copyright and related rights waived via CC0.

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