AMOs
The Interface Contracts Between FRAX Stablecoins and Subprotocols
Last updated
The Interface Contracts Between FRAX Stablecoins and Subprotocols
Last updated
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 Curve). 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 here.
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 governance, 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): 0x0F2a32f4f54Ec9D52a193E9E3493fb5FeA86Cbbe
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 multisig but the goals are the same): 0x49ee75278820f409ecd67063D8D717B38d66bd71
Fraxlend 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 dynamic interest rate to lenders. The Fraxlend AMO lends newly created FRAX into Fraxlend pairs that are approved by the frxGov process and earns interest from borrowers.
The Fraxlend AMO live stats are displayed on Frax Facts.
The Fraxlend AMO contract addresses:
Ethereum Mainnet - Fraxlend AMO V1: 0x0Ed8fA7FC63A8eb5487E7F87CAF1aB3914eA4eCaEthereum Mainnet - Fraxlend AMO V3: 0xf6E697e95D4008f81044337A749ECF4d15C30Ea6Arbitrum One - Fraxlend AMO V3: 0xCDeE1B853AD2E96921250775b7A60D6ff78fD8B4
Fraxtal - Fraxlend AMO V3: 0x58C433482d74ABd15f4f8E7201DC4004c06CB611
The Fraxswap TWAMM AMO loads time-weighted average market maker orders 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 0x629C473e0E698FD101496E5fbDA4bcB58DA78dC4
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.
Technical specifications such as interface and access control can be found on Github (TODO: make repo public).
Ethereum Mainnet FXB AMO: 0x452420df4AC1e3db5429b5FD629f3047482C543C
Fraxtal FXB AMO: 0xE6ed07952dC9993DD52c6d991Fa809C00eBE58a3
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 (0xB1748C79709f4Ba2Dd82834B8c82D4a505003f27) is on Ethereum. You can see a full list of positions here.
