Frax Finance, a decentralized finance (DeFi) protocol, has unveiled an ambitious roadmap geared towards bolstering the total dollar value of cryptocurrency assets secured in its layer 2 blockchain to $100 billion by 2026’s conclusion.
Presently, the total value locked (TVL) in Fraxtal amounts to $13.2 million, as per DefiLama data.
Outlined within the roadmap are intentions to roll out 23 layer 3 protocols within the span of a year. Additionally, the roadmap entails the introduction of novel assets like frxNEAR, frxTIA, and frxMETIS.
New Assets to be Issued on Fraxtal Blockchain
Founder Sam Kazemian and other contributors have put forward a proposition to issue both the existing assets (FRAX, sFRAX, frxETH) and the new assets on the Fraxtal blockchain going forward.
Layer 3 protocols play a vital role in furnishing decentralized applications with a highly adaptable and interoperable network constructed atop layer 2 scaling solutions.
Kazemian has also suggested reintroducing a mechanism to distribute protocol revenue among stakers of its native tokens.
The proposal entails activating the protocol fee switch, with 50% of the yield directed to veFXS (a derivative of the governance and utility token FXS), and the remaining 50% utilized for acquiring FXS and other Frax assets to pair in the FXS Liquidity Engine (FLE).
This strategy aims to fortify Frax’s financial position while substantially enhancing the liquidity of FXS and its paired Frax assets.
“We propose the reactivation of the protocol fee switch, allocating 50% of the yield to veFXS and the remaining 50% for purchasing FXS and other Frax assets to pair in the FXS Liquidity Engine (FLE),” stated the proposal.
“FLE will enable Frax to bolster its balance sheet while significantly boosting the liquidity of FXS and its associated Frax assets.”
The roadmap additionally delineates strategies to fully collateralize Frax’s stablecoin, FRAX, which currently holds a position among the top 10 dollar-pegged cryptocurrencies globally. It also aims to amplify yields on staked FRAX (sFRAX).
As of the time of this writing, FXS was valued at $1.35, marking a 2% increase over the past 24 hours. Nonetheless, the cryptocurrency has encountered a 14% decrease since the onset of the year.
DeFi TVL Surges Toward $100 Billion
The decentralized finance (DeFi) sector is witnessing a remarkable surge in popularity, evidenced by the total value of tokens (TVL) deposited on DeFi-focused blockchains soaring to $100 billion.
This milestone represents the highest level recorded since March 2022, as reported by data provider DeFi Llama.
The recent uptick in TVL can be primarily attributed to the surge in Bitcoin, fueled by the introduction of spot bitcoin exchange-traded funds (ETFs) in the United States.
From January 2021, where DeFi deposits stood at $17.3 billion, to December of the same year, where they peaked at nearly $178 billion, there has been a significant fluctuation. However, by December 2022, these figures had plummeted to below $40 billion, as indicated by data from DeFi Llama.
Furthermore, daily trading volumes on DeFi protocols have experienced a notable surge, reaching heights of up to $7.3 billion in early January, marking the highest levels recorded since March 2023.
