Frax will distribute nearly $400,000 to veFXS stakers this week.<\/p>\n
Frax stakers are set to share around $400,000 worth of fee revenue after Frax became one of a few web3 projects to activate a highly sought-after yet elusive \u201cfee switch.\u201d<\/p>\n
On April 3, Frax\u00a0tweeted<\/a>\u00a0that around $400,000 worth of protocol fees will go to veFXS stakers this week, suggesting that stakers are on track to collectively earn around $20.8 million in fees annually. The Frax team added it will also buy back $400,000 worth of FXS and divert the tokens to the project\u2019s protocol-owned liquidity.<\/p>\n On March 31, the Frax community\u00a0voted<\/a>\u00a0in favor of activating the fee switch with near unanimous support as part of its \u201cFrax Singularity Roadmap Part 1\u201d proposal following a week-long vote. Frax will divert 50% of fees to stakers and 50% of fees to its FXS buyback program.<\/p>\n Data from DeFi Llama indicates that Frax generated $47.4 million in revenue over the past 365 days.<\/p>\n <\/p>\n Frax\u2019s introduction of a revenue-sharing program follows Uniswap governance\u00a0passing<\/a>\u00a0a proposal paving the way for the activation of its\u00a0long-requested<\/a>\u00a0fee switch in early March. <\/p>\n The move was well received by traders, with the price of Uniswap’s UNI token rallying by more than 120% in two weeks to a March 6 high of $16, according to CoinGecko. However, UNI has since pulled back to $10.71.<\/p>\n However, Frax\u2019s FXS token has struggled to retain its recent gains. FXS rallied to $8 from $6.70 in the lead-up to the proposal passing, but has since slumped back to $6.82.<\/p>\n Frax\u2019s Singularity roadmap seeks to establish a new path forward for the protocol following the launch of its\u00a0Fraxtal Layer 2<\/a>\u00a0network in February and the project\u2019s stablecoin, FRAX, becoming\u00a0100% collateralized<\/a>.<\/p>\n The Singularity Part 1 proposal also set the stage for\u00a0revamping<\/a>\u00a0its sfrxETH liquid staking token (LST) to support restaking, plus allocating 250M FRAX to Morpho Labs\u2019 lending pools for Ethena\u2019s yield-bearing sUSDe stablecoin to bolster protocol revenue.<\/p>\n However, USDe has\u00a0garnered controversy<\/a>\u00a0since its explosive launch due to its\u00a0high yields<\/a>\u00a0derived from Lido\u2019s stETH LST and funding rates from shorting Ether.\u00a0Andre Cronje<\/a>, the serial DeFi developer, warned that the so-called synthetic dollar could become \u201cvery high risk\u201d should the markets turn bearish.<\/p>\n <\/p>\n Start for free<\/a><\/div>\n <\/p>\n Frax\u2019s LST is currently the seventh-largest liquid staking token with a total value locked of $856 million. Yet the broader LST sector is suffering from diminished growth amid the rise of\u00a0liquid restaking tokens<\/a>\u00a0(LRTs), which offer holders Ethereum staking rewards in addition to the points earned from restaking via EigenLayer, the pioneering Ethereum staking protocol.<\/p>\nSingularity Roadmap<\/h2>\n
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