Meeting Artifacts

July 20th, 2022 Deep Dive:

https://share.descript.com/view/gX5fQh3I7ke

Prep Materials / Resources

Meeting Notes:

Purpose of choosing Frax:

• looking at how stablecoins work in crypto
  • 3 types:
    • fully collateralized
      • USDC
      • USDT
      • DAI
    • fully algorithmic stablecoin
      • Terra Luna
    • hybrid stablecoins
      • Frax

What does Seignorage mean?

• Answer: The price a minter of a currency needs to pay to create the currency (in Frax’s case, it’s the cost of FXS for minting Frax)

How does minting work?

• Answer: Arbitrage opportunity when Frax is above $1 to mint Frax and then sell it. same thing when Frax is below $1, opportunity burn frax and get $1 of collateral + FXS out.

What is the collateral ratio?

• Answer: currently it’s 90%. Also used as a health factor for the system
• In a perfect world we’d want it to be 0% collateral ratio, but this leads to death spiral situations where people lose faith, sell the coin, which further pushes down price, and this continues downwards

Let’s talk about Curve pool: