Frax Finance Unveils Roadmap to Reach $100 Billion in Locked Assets on L2 Network by 2026

DeFi

Author

Ruholamin Haqshanas

Author

Ruholamin Haqshanas

About Author

Ruholamin Haqshanas is a contributing crypto writer for CryptoNews. He is a crypto and finance journalist with over four years of experience. Ruholamin has been featured in several high-profile crypto...

Author Profile

Share

Copied

Last updated: 

March 21, 2024

Why Trust Cryptonews

Cryptonews has covered the cryptocurrency industry topics since 2017, aiming to provide informative insights to our readers. Our journalists and analysts have extensive experience in market analysis and blockchain technologies. We strive to maintain high editorial standards, focusing on factual accuracy and balanced reporting across all areas - from cryptocurrencies and blockchain projects to industry events, products, and technological developments. Our ongoing presence in the industry reflects our commitment to delivering relevant information in the evolving world of digital assets. Read more about Cryptonews

Decentralized finance (DeFi) protocol Frax Finance has revealed an ambitious roadmap aimed at increasing the total dollar value of crypto assets locked in its layer 2 blockchain to $100 billion by the end of 2026. Currently, the total value locked (TVL) in Fraxtal stands at $13.2 million, according to data from DefiLama.The roadmap includes plans to launch 23 layer 3 protocols within a year, along with the introduction of new assets such as frxNEAR, frxTIA, and frxMETIS. 

New Assets to be Issued on Fraxtal Blockchain

Founder Sam Kazemian and other contributors proposed that both the existing assets (FRAX, sFRAX, frxETH) and the new assets be issued on the Fraxtal blockchain moving forward.Layer 3 protocols play a crucial role in providing decentralized applications with a highly customizable and interoperable network built on top of layer 2 scaling solutions.Kazemian also proposed reintroducing a mechanism to share protocol revenue with stakers of its native tokens. The proposal suggests turning on the protocol fee switch, with 50% of the yield flowing to veFXS (a derivative of the governance and utility token FXS) and the other 50% being used to purchase FXS and other Frax assets to pair in the FXS Liquidity Engine (FLE). This approach aims to strengthen Frax’s balance sheet while significantly increasing the liquidity of FXS and its paired Frax assets.“We propose that the protocol fee switch be turned back on, with 50% of the yield flowing to veFXS and the other 50% used to buy FXS and other Frax assets to pair in the FXS Liquidity Engine (FLE),” the proposal said. “FLE will allow Frax to continue building its balance sheet while significantly increasing the liquidity of FXS and its paired Frax assets.”The roadmap further outlines plans to fully collateralize Frax’s stablecoin, FRAX, which ranks among the top 10 dollar-pegged cryptocurrencies globally. It also aims to enhance yields on staked FRAX (sFRAX).At the time of writing, FXS was trading at $1.35, indicating a 2% gain over the past 24 hours. However, the cryptocurrency has experienced a 14% decline since the beginning of the year.

DeFi TVL Surges Toward $100 Billion

The decentralized finance (DeFi) sector is experiencing a surge in popularity, with the total value of tokens (TVL) deposited on DeFi-focused blockchains reaching $100 billion.This marks the highest level since March 2022, according to data provider DeFi Llama. The recent increase in TVL can be attributed to the rally in Bitcoin, driven by the launch of spot bitcoin exchange-traded funds (ETFs) in the United States.DeFi deposits surged from $17.3 billion in January 2021 to nearly $178 billion in December of the same year, only to drop below $40 billion in December 2022, as per data from DeFi Llama.Daily trading volumes on DeFi protocols have also surged, reaching as high as $7.3 billion in early January, the highest since March 2023.