AMOs
The Interface Contracts Between FRAX Stablecoins and Subprotocols
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The Interface Contracts Between FRAX Stablecoins and Subprotocols
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The Frax V3 expansion introduced several new AMOs. “Algorithmic Market Operations” (AMO) contracts are autonomous contracts that enact pre-programmed monetary policy into a specific subprotocol (either internally built and owned by Frax Protocol such as Fraxlend and Fraxswap, or external, such as ). This means that AMO controllers can perform open market operations such as minting FRAX stablecoins into an AMM or lending newly minted FRAX into a money market protocol if certain preprogrammed conditions are met or actions approved by governance. AMOs can interact with any separate protocol allowing FRAX V3 to add, remove, and combine any stability mechanism desired without changing the protocol.
Many of these AMOs also earn income for the protocol.
Read about older & obsolete (V2 & V1) AMOs .
The Aave AMO takes minted FRAX and supplies it into various Aave V3 pools, such as Ethereum and EtherFi, earning protocol interest by allowing users to borrow it. As of 10/2/2024, it is soon expected, per Aave , that FRAX will be removed from isolation mode, allowing Aave borrowers to use it as collateral for a wider range of borrowing opportunities. As a side benefit, the Aave AMO itself can temporarily borrow other stablecoins such as USDC use them to balance the FRAX peg by swapping out FRAX from Curve pools (such as FRAX/USDC) in times of extreme market stress.
Aave AMO (V3):
The Curve AMO mints FRAX stablecoins in select Curve pools approved by governance. The AMO also withdraws FRAX and burns supply to keep the exchange rate of each Curve pool in a tight range based on the USD price of FRAX by the reference oracles. Further depositing the Curve LP into Convex can give additional yield via Convex's CRV gauge boost, as well as CVX tokens.
Curve AMO (deprecated, many operations are now conducted via the main comptroller but the goals are the same):
The Fraxlend AMO contract addresses:
The FRAX Bonds AMO provides the FRAX ecosystem an ability to sell FRAX "bonds" at a discounted rate to the market through FRAX governance. Each unit of FRAX bond (also called FXB) is equal to one unit of locked FRAX, and at a pre-determined date the owner of the FXB is able to burn their FXB and receive their equal unit of FRAX. Through the FXB AMO, the Frax team auctions off FXBs to the public. The FRAX received by the AMO is then sent to FinresPBC.
is a permissionless, isolated lending market subprotocol of the Frax Finance ecosystem. Anyone can lend FRAX stablecoins into isolated Fraxlend markets where users deposit collateral to borrow FRAX and pay a to lenders. The Fraxlend AMO lends newly created FRAX into Fraxlend pairs that are approved by the process and earns interest from borrowers.
The Fraxlend AMO are displayed on Frax Facts.
Ethereum Mainnet - Fraxlend AMO V1: Ethereum Mainnet - Fraxlend AMO V3: Arbitrum One - Fraxlend AMO V3:
Fraxtal - Fraxlend AMO V3:
The Fraxswap TWAMM AMO loads into the Fraxswap AMM to buy or sell collateral over a long period of time. This allows for expanding of the FRAX balance sheet by buying collateral with FRAX stablecoins or contracting the supply of FRAX by selling balance sheet assets through TWAMM orders. The AMO can also be used to repurchase FXS tokens with protocol revenue/fees. The Fraxswap TWAMM AMO contract address is
Technical specifications such as interface and access control can be found on (TODO: make repo public).
Ethereum Mainnet FXB AMO:
Fraxtal FXB AMO:
Various protocol-owned multisig addresses hold and manage revenue-earning positions in accordance with governance decisions. Examples include Curve/Convex farms and directly held tokens like sDAI and sfrxETH. The largest multisig () is on Ethereum. You can see a full list of positions .
