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Frax Finance unveils a roadmap to reach $100 billion in locked-in L2 assets by 2026.

Increasing locked assets to this level would mean a significant increase in trust and acceptance. The success of this plan could also accelerate the development and adoption of Tier 2 technologies.

Date: 2024-03-22 Author: Łukasz Michałek
Frax Finance unveils a roadmap to reach $100 billion in locked-in L2 assets by 2026.

Decentralized finance protocol (DeFi) Frax Finance has unveiled an ambitious roadmap to increase the total value of crypto assets encapsulated in the Tier 2 blockchain to $100 billion by the end of 2026.

According toDefiLama, Fraxtal’s total blocked value(TVL) currently stands at $13.2 million. The plan includes plans to launch 23 Layer 3 protocols within a year, along with the introduction of new assets such as frxNEAR, frxTIA and frxMETIS.

The new assets will be issued on the Fraxtal Blockchain platform

Founder Sam Kazemian and colleagues have proposed that both existing assets (FRAX, sFRAX, frxETH) and new assets will be issued on the Fraxtal blockchain in the future. Layer 3 protocols play a key role in providing decentralized applications with a highly configurable and interoperable network built on Layer 2 scaling solutions.

Kazemian also proposed reintroducing a mechanism for sharing protocol revenues with stakers of its native tokens.

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The proposal suggests a change in the protocol fee. It is assumed that half of the profit will go to veFXS, which is derived from the FXS utility and management token, and the remaining half will be used to purchase FXS currency and other Frax assets for pairing within the FXS Liquidity Engine (FLE).

This method is used to increase the Frax balance sheet while significantly increasing the liquidity of FXS and related Frax assets.

The proposal reads: “We propose to re-incorporate a change in the protocol fee so that 50% of the profit flows to veFXS and the remaining 50% is used to purchase FXS currency and other Frax assets for pairing in the FXS liquidity engine (FLE).”

“The FLE will allow Frax to continue to build its balance sheet while significantly increasing the liquidity of FX S and related Frax assets.” The plan also includes a desire to fully secure Frax stablecoin, which is one of the world’s top ten dollar-linked cryptocurrencies.

It also aims to increase the profitability of FRAX (sFRAX) instruments. Over the past 24 hours, the FXS exchange rate has risen 2% to $1.35. However, the cryptocurrency has seen a 14% year-to-date decline.

DeFi TVL rises to $100 billion.

The decentralized finance(DeFi) sector is becoming increasingly popular, with the total tokens (TVL) deposited in blockchains focused on DeFi exceeding $100 billion. According to data provider DeFi Llama, this marks the highest level since March 2022.

The recent rise in TVL can be attributed to the rise in Bitcoin ‘s exchange rate, fueled by the launch of Bitcoin Exchange Traded Funds (ETFs) in the United States.

According to DeFi Llama, DeFi’s deposits rose from $17.3 billion in January 2021 to nearly $178 billion in December of the same year, before falling below $40 billion in December 2022.

DeFi’s daily protocol trading volumes also increased, reaching as much as $7.3 billion in early January , the most since March 2023.

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Łukasz Michałek
Łukasz Michałek
Founder of the rapidly developing cryptocurrency channel "Biblia Kryptowalut" on YouTube. He also co-creates the Arena Trading group with Marek. Łukasz is fascinated and passionate about blockchain technology and cryptocurrencies, which constitute the central element of his activity in the cryptocurrency industry.
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