Ethena Labs Funds Frax Finance in DeFi Expansion

Ethena Labs Funds Frax Finance in DeFi Expansion

Ethena Labs Funds Frax Finance in DeFi Expansion

Ethena Labs has approved the Singularity Roadmap proposal for the Frax Finance DeFi protocol, providing up to $250 million in funding.

The company Ethena Labs (ENA), responsible for developing the decentralized finance (DeFi) system for the USDe stablecoin, has announced the approval of the Singularity Roadmap proposal for the DeFi protocol Frax Finance (FRAX). Under this program, USDeFRAX POL will get up to $250 million in funding from Ethena Labs via the Curve automated market operation (AMO).

Following clearance, FRAX started the process of adding USDe POL with the goal of creating the largest dollar liquidity pool on the network and using this liquidity pool to diversify FRAX’s yield sources.

In a post on social media platform X, Ethena Labs shared their thoughts on the choice and recognized the FRAX team as important players in the DeFi space. Ethena Labs continued, “We are thrilled to collaborate in the upcoming months to expand the oncahin dollar economy.”

The community approves of Fraxlend AMO’s proposal for new pairs, increasing the issuance of FRAX tokens

Last week saw the publication of the governance proposal, which sought to authorize the Fraxlend AMO for new pairs such as sUSDe-FRAX and USDe-FRAX. Following community discussion, Fraxlend’s AMO received sufficient support to authorize the creation of additional FRAX tokens secured by overcollateralized debt.

The Fraxlend ecosystem’s AMOs greatly improve FRAX, offering maximum flexibility while preserving the fundamental stability mechanism that has made FRAX the most potent stablecoin protocol. Frax Finance has implemented AMOs on various platforms such as Aave, Rari, and Fraxlend. Frax Finance also intends to increase the number of pairings available in the Fraxlend AMO.

Fraxlend is a lending platform created especially for stablecoins based on Frax. It enables customizable non-custodial loans, debt origination, and the integration of collateral assets within the Frax Finance ecosystem. It is one of three subprotocols devoted to the integration of decentralized stablecoins within the Frax Protocol. Subprotocols have enhanced the Frax Protocol, enabling the issuance of stablecoins such as FRAX, FPI, and frxETH.

Curve Finance data indicates that as of the time of writing, the newly created liquidity pool created on Curve had a total liquidity value of $44.9 million, consisting of $14.6 million in USD synthetic dollars and $30.6 million in FRAX coins.

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