Frax Finance Sets Ambitious Goal to Reach $100 Billion TVL with Singularity Roadmap
Frax Finance, a decentralized finance (DeFi) protocol, has recently revealed its Singularity Roadmap, aiming to boost the total value locked (TVL) of its layer 2 blockchain, Fraxtal, to $100 billion by the end of 2026. This ambitious goal represents a staggering 760,000% increase from the current TVL levels of $13 million.
Introducing Fraxtal and Achieving 100% Collateralization Ratio
The Frax ecosystem is powered by Fraxtal, which serves as Frax Financeโs operating system. With the launch of Fraxtal and the achievement of an effective 100% Collateralization Ratio (CR), Frax Finance has consolidated its core product offerings.
To reach the $100 billion TVL goal, the protocol has already generated over $45 million and reached the coveted 100% CR milestone.
With the milestone achievement, the FRAX stablecoin, which has been relatively dormant during this process, and the FXS revenue share will undergo a โtransformative change.โ
Layer 3s on Fraxtal and Adoption of the Protocol
The upcoming introduction of Layer 3s (L3s) on Fraxtal is expected to significantly contribute to the growth and adoption of the protocol. Fraxtal, built on the Optimism (OP) network, is one of the most widely used layer 2 solutions on top of Ethereum (ETH).
The Frax team has developed underlying incentives to provide a seamless experience for developers and users, further encouraging adoption. By owning the entire stack, Frax can introduce advanced features and enhance the on-chain experience, making Fraxtal the preferred platform for holding, staking, and transferring crypto assets.
Expansion Strategy: Establishing 23 Layer 3s
Frax Finance plans to establish 23 Layer 3s within 365 days, initiating the Fraxtal Nation community. By supporting these chains with developer access, incentives, and investment, Frax aims to foster a positive-sum approach and provide additional support to official partners.
The protocol will allocate substantial allocations of FXTL points to these partners, solidifying the role of the FXS token as the ultimate beneficiary of the Frax ecosystem.
Allocating Revenue from Protocol Fees
Frax Finance founder Sam Kazemian intends to allocate 50% of the revenue from protocol fees to veFXS token holders. The remaining 50% will be used to acquire FXS and other Frax assets for pairing in the FXS Liquidity Engine (FLE).
This initiative aims to increase liquidity, strengthen the Frax balance sheet, and provide additional incentives for stakeholders in the protocol.
Reactivate Protocol Fee Switch
The proposal also seeks to reactivate the protocol fee switch, which was temporarily turned off during the consolidation phase. By reigniting this switch, a portion of the yield generated from protocol fees will be directed toward veFXS token holders. veFXS represents a locked version of the native token, FXS, and offers enhanced voting power and participation in the Frax ecosystem.
Impact on FXS Token Performance
As of now, the FXS token 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 tokenโs performance is yet to be determined.
Frax Financeโs Singularity Roadmap sets an ambitious goal of reaching $100 billion TVL for its Fraxtal blockchain. With milestones achieved and plans for expansion, the protocol aims to solidify its position as a leading player in the DeFi space.
Hot Take: Frax Financeโs Path to $100 Billion TVL
Frax Finance recently unveiled its Singularity Roadmap, outlining its strategy to propel the TVL of its layer 2 blockchain, Fraxtal, to $100 billion by 2026. This ambitious goal represents a significant increase from the current TVL levels. The roadmap includes key milestones and initiatives that will contribute to achieving this target:
โ Launching Fraxtal and achieving 100% Collateralization Ratio
โ Transformative change for FRAX stablecoin and FXS revenue share
โ Introduction of Layer 3s on Fraxtal and enhanced adoption
โ Establishment of 23 Layer 3s within 365 days
โ Allocating revenue from protocol fees to veFXS token holders
โ Reactivating the protocol fee switch
โ Impact on FXS token performance
Frax Financeโs Singularity Roadmap demonstrates its commitment to innovation and growth in the DeFi sector. With strategic plans in place, it aims to solidify its position as a leading decentralized finance protocol and achieve significant value locked on its Fraxtal blockchain.
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