Frax to Boost Liquidity with $250M USDe Allocation via Curve AMO

Frax Finance has committed $250 million to boost liquidity for its FRAX stablecoin as part of the recently unveiled Singularity Roadmap.
The $250 million allocation will be directed towards a USDeFRAX liquidity pool on Curve creating a deeper pool of dollar-backed assets.
The Singularity Roadmap outlines reaching $100 billion in TVL on its L-2 blockchain Fraxtal by the end of 2026.

Frax Finance, a prominent player in the decentralized finance (DeFi) lending space, has announced a $250 million allocation to bolster the liquidity of its FRAX stablecoin. The $250 million will be channeled into a USDeFRAX liquidity pool on Curve. The use of USDe, a synthetic dollar from Ethena Labs allows Frax to diversify its sources of yield potentially leading to improved returns. Ethena Labs posted on X that Frax has a plan for the future that includes creating a deep pool of liquidity for their stablecoin using USDe.

Excited to share the approval of FRAX's singularity roadmap proposal, which includes an allocation towards a USDeFRAX POL via the Curve AMO with a $250m USDe ceiling pic.twitter.com/eM9T4Cjm22
— Ethena Labs (@ethena_labs) April 8, 2024

This commitment is part of Frax’s Singularity Roadmap, a recently revealed plan outlining the protocol’s future trajectory. This strategic move aims to create a deeper pool of dollar-backed assets for FRAX fostering greater stability and resilience against market fluctuations.

The Singularity Roadmap serves as a blueprint for Frax’s future development. The roadmap establishes a target of $100 billion in TVL for Fraxtal, Frax’s Layer 2 blockchain by the close of 2026. This ambitious goal signifies Frax’s commitment to expanding its user base and fostering wider adoption of its DeFi ecosystem.

Furthermore, the roadmap proposes the launch of 23 new Layer 3 networks within a year. These Layer 3 networks, envisioned as sub-communities within the broader Frax ecosystem, will each possess a distinct identity and cultural focus.

The Singularity Roadmap also emphasizes enhancements to the FXS token, the core governance token of the Frax ecosystem. The roadmap proposes the revival of a mechanism for sharing protocol revenue with stakers of veFXS tokens.

Ethena Labs had surpassed the $2 billion mark in total value locked (TVL) on April 6, less than two months after USDe was launched on the mainnet on February 19, according to DefiLlama data. It had made headlines last month as its governance token, ENA, was generating buzz ahead of its official launch on Binance’s Launchpool on March 30. The ENA token had seen a significant prelaunch surge with futures tied to the token rising over 22% on the decentralized exchange Aevo.