Frax Finance Reveals Ambitious Roadmap to Lock $100 Billion in Assets on L2 Network by 2026
Decentralized finance (DeFi) protocol Frax Finance has announced its ambitious roadmap to increase the total dollar value of crypto assets locked in its layer 2 blockchain to $100 billion by the end of 2026. Currently, the total value locked (TVL) in Fraxtal stands at $13.2 million, according to data from DefiLama.
New Assets Issued on Fraxtal Blockchain
Founder Sam Kazemian and other contributors have proposed issuing both existing assets (FRAX, sFRAX, frxETH) and new assets on the Fraxtal blockchain moving forward. This proposal aims to provide a highly customizable and interoperable network for decentralized applications built on top of layer 2 scaling solutions.
Kazemian has also proposed reintroducing a mechanism to share protocol revenue with stakers of its native tokens. The proposal suggests turning on the protocol fee switch, with 50% of the yield flowing to veFXS (a derivative of the governance and utility token FXS) and the other 50% being used to purchase FXS and other Frax assets to pair in the FXS Liquidity Engine (FLE). This approach aims to strengthen Fraxโs balance sheet while significantly increasing the liquidity of FXS and its paired Frax assets.
Enhancing Stability and Yields
The roadmap further outlines plans to fully collateralize Fraxโs stablecoin, FRAX, which is among the top 10 dollar-pegged cryptocurrencies globally. Additionally, it aims to enhance yields on staked FRAX (sFRAX).
DeFi TVL Surges Toward $100 Billion
The decentralized finance (DeFi) sector is witnessing a surge in popularity, with the total value of tokens (TVL) deposited on DeFi-focused blockchains reaching $100 billion. This marks the highest level since March 2022, according to data provider DeFi Llama.
This recent increase in TVL can be attributed to the rally in Bitcoin, driven by the launch of spot bitcoin exchange-traded funds (ETFs) in the United States. DeFi deposits experienced significant growth from $17.3 billion in January 2021 to nearly $178 billion in December of the same year, only to drop below $40 billion in December 2022, as per data from DeFi Llama.
Daily trading volumes on DeFi protocols have also surged, reaching as high as $7.3 billion in early January, the highest since March 2023.
Hot Take: Frax Finance Aims for Massive Growth
Frax Finance has set an ambitious goal of locking $100 billion worth of assets on its layer 2 blockchain by 2026. With its roadmap, which includes launching new assets and implementing mechanisms to enhance liquidity and yield, Frax Finance aims to position itself as a major player in the decentralized finance (DeFi) space.
The surge in TVL across DeFi-focused blockchains indicates growing interest and adoption of decentralized finance. As more investors recognize the potential of DeFi protocols and their ability to provide customizable and interoperable solutions, the total value of tokens locked in DeFi is expected to continue rising.
Frax Financeโs roadmap demonstrates its commitment to innovation and addressing the needs of its users. By fully collateralizing its stablecoin and enhancing yields on staked assets, Frax Finance aims to provide a secure and rewarding experience for DeFi participants.
As the crypto market evolves and matures, it will be interesting to see how Frax Finance progresses toward its $100 billion locked assets target and contributes to the growth of the DeFi ecosystem.
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