Frax Finance Considers Revenue Share for veFXS Holders

Frax Finance Considers Revenue Share for veFXS Holders

Frax Finance Considers Revenue Share for veFXS Holders

Frax Finance seeks community feedback on reinstating revenue sharing, prompting positive responses from industry players.

The core team of Frax Finance is deliberating on a proposition to distribute protocol revenue to veFXS token holders. The proposal’s approval will be up to the community, according to Frax’s CEO.

If submitted, the proposition would follow a similar one last week by the leading decentralized exchange, Uniswap.

Frax’s founder and CEO, Sam Kazemian, stated that the core team behind the decentralized finance (DeFi) protocol, Frax Finance, might soon adopt the proposal of the dominant decentralized exchange (DEX), Uniswap, to distribute a portion of protocol fees to stakers of its native token.

FXS is the governance and utility token of the ecosystem. veFXS tokens are issued to users who secure their FXS, enabling them to retain their governance and utility rights. veFXS tokens are tradable on the Ethereum mainnet and Frax Finance’s layer 2 platform, Fraxtal.

vFXS stakeholders will be advised to share protocol revenue, according to the proposal, Kazemian said in an interview. In 2022, the community voted to discontinue revenue sharing.

Uniswap proposed last week that holders of UNI tokens who stake and delegate their staked tokens receive a portion of the DEX’s fee profits as compensation. UNI serves as the Uniswap native governance token.

As a result of the crypto community’s approval, UNI increased by 60%. Several additional DeFi tokens, such as COMP, AAVE, and SUHI, also experienced a surge in value.

“We are proposing it in the same manner as Uniswap.” “The community shall decide whether or not to approve it,” Kazemian stated.

Assigning a fixed percentage of rewards in exchange for staking cryptocurrencies for a specified duration to the operation of a blockchain is comparable to earning interest on fixed-income securities.

Delegation is the transfer of voting rights, which are granted to delegates who are recognized as decentralized autonomous organizations in exchange for governance tokens.

Community Feedback on Frax Finance’s Proposal

“Should veFXS stakeholders once again resolve to return Frax Protocol revenue to veFXS stakeholders? Currently, the majority of Frax Finance’s eight-figure annual revenue, which is increasing, is being retained in the Treasury. Is it time to turn it back on?” Frax Finance asked on social media X, indicating that a fee-switch proposal was imminent.

The social media post received favorable responses from several participants in the cryptocurrency market, such as stablecoin-focused decentralized exchange Curve and pseudonymous analyst Ignas.

Read Previous

SAVM Price Surges Almost 40% After KuCoin Listing

Read Next

Zircuit’s TVL Surpasses $200 Million Amidst Staking Surge