Frax Finance ¤
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English 🇰🇾
  • Frax Ecosystem Overview
  • FXS & veFXS
    • Frax Shares (FXS)
    • veFXS
    • Gauges
    • FXS Distribution
    • FXS Smart Contract & Addresses
  • GOVERNANCE
    • Frax Governance Overview
    • How It Works
    • Advanced Concepts
    • Fraxtal Snapshot Voting
  • FRAX V1 - ORIGINAL
    • Original Design
    • Staking Contracts
    • FRAX ABI & Token Addresses
    • Frax V1 Pool ABI & Addresses
    • Core Frax Multisigs
  • FRAX V2 - Algorithmic Market Operations (AMO)
    • AMO Overview
    • AMO Minter
    • Collateral Investor
    • Curve
    • Uniswap v3
    • FRAX Lending
    • Decentralization Ratio (DR)
  • FRAX V3 - 100% CR AND MORE
    • Overview
    • Fraxtal
    • AMOs
    • RWAs
    • sFRAX
    • FXBs
    • sFRAX Token Addresses
    • sFRAX & FXB Multisigs
  • Bridging
    • Fraxferry
    • LayerZero x Stargate
    • Fraxtal Bridge
  • Frax Price Index
    • Overview (CPI Peg & Mechanics)
    • Frax Price Index Share (FPIS)
    • FPIS Distribution
    • CPI Tracker Oracle
    • FPI Controller Pool
    • veFPIS
    • FPIS Conversion / FPIS Locker
    • FPI and FPIS Token Addresses
    • FPI Multisigs
  • Fraxswap
    • Overview
    • Technical Specifications
    • Fraxswap Contract Addresses
  • Fraxlend
    • Fraxlend Overview
    • Key Concepts
    • Lending
    • Borrowing
    • Advanced Concepts
      • Position Health & Liquidations
      • Interest Rates
      • Vault Account
    • ABI & Code
    • Fraxlend Multisigs
  • Frax Ether
    • Overview
    • frxETH and sfrxETH
    • Technical Specifications
    • Redemption
    • frxETH V2
    • frxETH V2 Technical Details
    • frxETH Code & V2 Addresses
    • frxETH and sfrxETH Token Addresses
    • frxETH Multisigs
  • BAMM
    • Overview
  • Frax Oracle
    • Frax Oracle Overview
    • How It Works
    • Advanced Concepts
    • Fraxtal Merkle Proof Oracles
  • Guides & FAQ
    • FAQ
    • Staking
    • Uniswap Migration / Uniswap V3
    • Fraxswap / FPI
  • Miscellany
    • All Contract Addresses
    • Bug Bounty
    • Miscellaneous & Bot Addresses
    • API
  • Other
    • Audits
    • Media Kit / Logos
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  • Summary
  • Ideal use cases by other protocols, stablecoin issuers, & DAOs include:

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  1. Fraxswap

Overview

A Unique Time Weighted Average Market Maker for Trustless Monetary Policy

PreviousFPI MultisigsNextTechnical Specifications

Last updated 7 months ago

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Summary

Fraxswap is the first constant product automated market maker with an embedded time-weighted average market maker (TWAMM) for conducting large trades over long periods of time trustlessly. It is fully permissionless and the core AMM is based on Uniswap V2. This new AMM helps traders execute large orders efficiently. Fraxswap is a fully permissionless AMM which means others can create their own LP pairs in for any two tokens, like Uniswap.

The motivation for building Fraxswap was to create a unique AMM with specialized features for algorithmic stablecoin monetary policy, forward guidance, and large sustained market orders to stabilize the price of one asset by contracting its supply or acquiring a specific collateral over a prolonged period. Specifically, Frax Protocol will use Fraxswap for:

  1. Buying back and burning FXS with AMO profits,

  2. Increase the stability of the pegs for the FRAX & FPI stablecoins

  3. Selling FRAX to purchase hard assets

  4. Deploying protocol-owned liquidity for income and utility, such as FRAX/FXS and FRAX/<gas token> on various chains.

Ideal use cases by other protocols, stablecoin issuers, & DAOs include:

1) Accumulation of a treasury asset (such as stablecoins) over time by slowly selling governance tokens. 2) Buying back governance tokens slowly over time with DAO revenues & reserves. 3) Acquiring another protocol's governance tokens slowly over time with the DAO's own governance tokens (similar to a corporate acquisition/merger but in a permissionless manner). 4) Defending "risk free value" (RFV) for treasury based DAOs such as Olympus, Temple, and various projects where the backing of the governance token is socially or programmatically guaranteed.

To use Fraxswap for monetary policy, the best method is to create a token pair and add protocol controlled liquidity. Then TWAMM orders can be placed in any size in either direction as desired for forward guidance and rebalancing of the DAO's net assets. See the to understand slippage calculations and liquidity optimizations for TWAMMs.

Fraxswap UI:

technical specifications section
https://app.frax.finance/swap/main
Fraxswap