Frax Finance Co-Founders Propose To Buy Back $20 Million Of FXS Tokens
Sam Kazemian and Travis Moore, the co-founders of Frax Finance, have announced a new governance proposal for the $20 million acquisition of the project’s Frax Shares (FXS) tokens.
Frax Finance is an algorithmic stablecoin protocol, with its two-token system consisting of a Frax stablecoin (FRAX) and a Frax Shares (FXS) governance token. The FRAX stablecoin maintains price stability against the USD through two mechanisms, partly collateralized by USDC and an algorithm for trading between FRAX and FXS.
According to Sam Kazemian and Travis Moore, a buyback is needed to reverse the FXS downtrend, which has consistently plunged more than 85% from the ATH at $42.8 hits earlier this year.
This means that the duo’s proposal indirectly acknowledges that FXS, like the rest of the crypto market, has indeed fallen into a “hibernation” cycle. However, both still insist Frax Finance as a stablecoin project is still in good shape.
FXS is currently trading at $6, up from $4 when the proposal was made. At current prices, a $20 million buyback could remove about 3.37% of the 99.8 million coins from FXS’ total supply.
As a result, FXS at current prices is the lowest valued asset in the project’s stockpile. However, if approved, Frax Finance will buy back and burn $20 million of FXS. The buyback and burn process removes those FXS tokens from circulation resulting in a decrease in the circulating supply in the market, somewhat easing the selling pressure on the project.
The acquisition will take place through Fraxswap, a DEX built on top of Frax if the community approves the proposal. This process can take anywhere from three days or a month to complete.
This latest governance proposal on Frax Finance goes against the recent trend seen in several popular DeFi protocols, where community members are calling on the project team to take action on managing reserves. emergency response to bad market conditions.
As proof, just a few days ago, Lido proposed to sell 10,000 ETH to prepare for the “crypto winter”. Other projects like Fei Protocol are also considering plans to liquidate part of their coffers for the same reason.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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Harold
CoinCu News
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DeFi
Frax Finance Co-Founders Propose To Buy Back $20 Million Of FXS Tokens
Sam Kazemian and Travis Moore, the co-founders of Frax Finance, have announced a new governance proposal for the $20 million acquisition of the project’s Frax Shares (FXS) tokens.
Frax Finance is an algorithmic stablecoin protocol, with its two-token system consisting of a Frax stablecoin (FRAX) and a Frax Shares (FXS) governance token. The FRAX stablecoin maintains price stability against the USD through two mechanisms, partly collateralized by USDC and an algorithm for trading between FRAX and FXS.
According to Sam Kazemian and Travis Moore, a buyback is needed to reverse the FXS downtrend, which has consistently plunged more than 85% from the ATH at $42.8 hits earlier this year.
This means that the duo’s proposal indirectly acknowledges that FXS, like the rest of the crypto market, has indeed fallen into a “hibernation” cycle. However, both still insist Frax Finance as a stablecoin project is still in good shape.
FXS is currently trading at $6, up from $4 when the proposal was made. At current prices, a $20 million buyback could remove about 3.37% of the 99.8 million coins from FXS’ total supply.
As a result, FXS at current prices is the lowest valued asset in the project’s stockpile. However, if approved, Frax Finance will buy back and burn $20 million of FXS. The buyback and burn process removes those FXS tokens from circulation resulting in a decrease in the circulating supply in the market, somewhat easing the selling pressure on the project.
The acquisition will take place through Fraxswap, a DEX built on top of Frax if the community approves the proposal. This process can take anywhere from three days or a month to complete.
This latest governance proposal on Frax Finance goes against the recent trend seen in several popular DeFi protocols, where community members are calling on the project team to take action on managing reserves. emergency response to bad market conditions.
As proof, just a few days ago, Lido proposed to sell 10,000 ETH to prepare for the “crypto winter”. Other projects like Fei Protocol are also considering plans to liquidate part of their coffers for the same reason.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
Join CoinCu Telegram to keep track of news: https://t.me/coincunews
Follow CoinCu Youtube Channel | Follow CoinCu Facebook page
Harold
CoinCu News
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