Interview with the founder of Frax: Talking about Frax’s currency premium, invisible products, and on-chain governance
Original Author: Revelo Intel
Compilation of the original text: Deep Tide TechFlow
Compilation of the original text: Deep Tide TechFlow
stable currency
In this episode, DeFi Dave interviewed Frax founder Sam Kazemian and talked about Frax's currency premium, stealth products, and on-chain governance. Below are some notes recorded, let's find out more together.
stable currency
Any stablecoin that is not backed by at least 100% external collateral will not succeed. Recently, the Frax community voted to stake 100% of the entire supply of $FRAX. $FRAX is the only fully collateralized decentralized stablecoin.
Frax's currency premium
The monetary premium is the concept that if you issue a stablecoin or liability, people will use that stablecoin without expecting a payment or interest rate from the issuer.
The vast majority of crypto protocols will become stablecoins or issue their own stablecoins on a large scale.
Most financial primitives look like fractional reserve banks.
LSD or Liquid Collateral Derivatives are basically $ETH stablecoins.
A stablecoin is something issued by an entity with some implicit or explicit promise to maintain a certain price.
$frxETH has Curve AMO, which can be swapped between $frxETH and $ETH, like a minting and redeeming function.
Financial laws or financial incentives affect protocols or protocol builders and communities.
The most important and valuable way that large DeFi protocols build moats to protect themselves and maximize their value is to issue a liability that people use as money.
Stablecoinism
Stablecoinism is abstracted like cross-chain bridges that one might not think of.
The most valuable advantage of a cross-chain bridge is that it is defensible, and others cannot fork or commoditize it by lowering fees, but in fact they issue a stablecoin on the other side of the chain.
The cross-chain bridge project is essentially a stable currency issuer.
Curve is an excellent exchange, better than anything else.
become a builder
The most important thing is to ensure safety and see it as a responsibility, which is the foundation of this industry.
It is no accident that Frax has become more secure as it has grown bigger and more important.
Frax's Stealth Products
They are developing a product called BAMM, which stands for Borrowing Automated Market Maker, which is a potential zero-to-one innovation for DeFi.
The idea is that no oracle is needed, it will build liquidity against any asset and allow people to borrow it when the liquidity of the asset rises.
On-chain governance of Frax
When Frax creates a signature, they fully submit it to the FRXGov contract on-chain, and after a certain amount of time $FXS holders can vote or veto the signature. Then after a certain amount of time, the smart contract itself allows that signature to be executed on-chain.
Supervision
There are a lot of people who like to be actively involved in governance.
Supervision
All things will be resolved in the future.
There are many areas in cryptocurrency that require active cooperation with regulation.
