sFRAX
Staking vault targeting the IORB rate
Last updated
Staking vault targeting the IORB rate
Last updated
Staked FRAX (sFRAX) is an ERC4626 staking vault that distributes part of the Frax Protocol yield weekly to stakers denominated in FRAX stablecoins. The sFRAX token represents pro rata deposits within the vault and is always withdrawable for FRAX stablecoins at the pro rata rate at all times. sFRAX APY attempts to roughly track the interest on reserve balances (IORB) rate of the United States Federal Reserve using the IORB oracle. This benchmark rate is generally accepted as the “risk free rate” of the US Dollar. The FRAX staking vault attempts, but does not guarantee in any way, to target this rate.
The sFRAX vault APY is based on a utilization function that can be set by the frxGov governance module. The utilization curve started at a top end of 50% APY and theoretically has no bottom, but as of 10/2/2024, has settled in the 5-10% range. As more FRAX is staked in the vault, the protocol will attempt to deploy FRAX to DeFi governance approved AMOs/strategies as well as RWA sources that yield as close to the IORB rate as possible to keep the floor APY near the IORB target. Every Wednesday at 11:59:59 UTC the Frax Protocol adds newly minted FRAX stablecoins into the sFRAX vault. This newly minted FRAX is one-to-one proportional to the earnings of the Frax Protocol over the prior week and thus fully backed at 100% CR. Each sFRAX epoch is 1 week and identical in length and start time as the FXS gauge and sfrxETH epoch. There is no protocol guarantee that the deployed capital will be from a particular type of asset at any time. The frxGov governance module will control the deployment path and asset type for sFRAX yield. The Staked FRAX vault’s yield predominantly originates from real-world asset (RWA) strategies employed by Frax Protocol partner custodians including, but not limited to, FinresPBC.
sFRAX: 0xA663B02CF0a4b149d2aD41910CB81e23e1c41c32
