Staked Frax Ether
sfrxETH is the staked version of frxETH designed to accrue the staking yield of the Frax ETH valiators. The exchange rate of frxETH per sfrxETH increases over time as staking rewards accrue to the vault.
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- Asset Type: ERC-20
- Market Cap: $388.7M
- Fully Diluted Valluation: $388.7M
- FDV / MC: 1
- Ranking inside Exponential (excluding stables): #40
- Circulating Supply: 101,398
- Total Supply: 101,398
- Volume (24H): $260.9K
- ATH: $7,545.09 (02/16/2023)
- ATL: $1,147.58 (12/23/2022)
sfrxETH is a low-cap, fully collateralized asset. This asset is exposed to the underlying risks of Frax Ether, a protocol rated as Average.
sfrxETH has an uncapped supply but has inflation control or burn mechanisms in place. sfrxETH is the staked version of frxETH that accrues staking rewards. Its value increases over time relative to frxETH as staking yield accrues to the staking vault.
What is sfrxETH used for?
sfrxETH is the staked version of frxETH that accrues staking yield. All profit generated from Frax ETH validators including staking rewards, transaction fees, and MEV (maximal extractable value), are distributed to sfrxETH holders. Users can exchange their frxETH for sfrxETH at any time by depositing into the sfrxETH vault. As validators accrue staking yield over time, an equivalent amount of frxETH is minted and added to the vault. sfrxETH holders can redeem their staking rewards by converting back to frxETH. The exchange rate of frxETH to sfrxETH thus increases over time as staking rewards are distributed to the vault. Holding sfrxETH entitles you to a proportional claim on an increasing amount of frxETH.
How does Frax Ether work
The Frax Ether system consists of three core components: frxETH, sfrxETH, and the Frax ETH minter. The underlying code for frxETH is largely forked from both the FRAX and FPI stablecoins. sfrxETH is obtained by first approving the sfrxETH contract as a frxETH spender, and then calling the mint function. As validators earn staking rewards, an equivalent amount of frxETH is minted and sent to the sfrxETH contract. This means the user may redeem a greater amount of frxETH than they initially minted. The Frax ETH minter mints frxETH when it receives ETH deposits. Whenever a deposit pushes the minter balance over 32 ETH, the contract automatically spins up a new validator. The protocol currently charges a 10% fee on all generated staking rewards.
How secure is Frax's liquid staking solution?
frxETH is designed to be a stablecoin that is loosely pegged to ETH. This means the price of frxETH could depeg from time to time based on current market conditions. Frax has also set the withdrawal address to the Frax multisig at launch.
