FRAX & the 4pool Curve Takeover | Sam Kazemian

Apr 13, 2022

Sam Kazemian, founder of the innovative Frax stablecoin protocol, shares his insights into the dynamic world of decentralized finance. He dives into the ongoing 'Stablecoin Wars,' discussing the implications of Curve's new four pool strategy. Sam also reflects on the evolution of stablecoins, comparing the innovative Frax model to others like UST and USDC. He paints a vivid picture of money markets, bringing a personal touch to complex macroeconomic concepts. With a booming market cap, Sam leaves listeners eager about Frax's future in crypto!

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ANECDOTE

Central Bank Parable

Sam Kazemian tells a story about a central bank's evolution, starting with 1:1 gold-backed paper money.
The bank gradually eliminates redemptions, lends out gold, and eventually targets a consumer price basket.

INSIGHT

Frax Design

Frax is a fractional-algorithmic stablecoin, combining collateral and algorithms.
It maintains a tight peg (within 1 cent of $1) and boasts billions in on-chain liquidity.

INSIGHT

Frax Components

The Frax system involves two tokens: FRAX (stablecoin) and FXS (governance token).
Collateralization ranges from 80-90%, consisting of hard assets and Curve LP tokens.

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Sam Kazemian is the founder of Frax, the fractional-algorithmic stablecoin protocol. After co-founding the decentralized Wikipedia startup Everipedia, Sam set out to pioneer the algorithmic stablecoin space. The FRAX stablecoin now has a market cap of over $2.6 billion, and the protocol’s FXS governance token is up 300% in the last year.

In this episode, we explore the Stablecoin Wars, in which different protocols compete for liquidity and composability in DeFi. Sam brings a 1st-person perspective into the developments surrounding UST and the recently launched 4pool on Curve, which consists of stablecoins UST, FRAX, USDT, and USDC.

A highlight of this conversation is Sam’s parable of an archetypal central bank, in which he cruises through a number of salient takes on money markets and macroeconomics. There is a lot to learn about this Cambrian explosion of financial technology, and Sam is a great teacher. Stick around to find out why walked away from this conversation bullish on Frax.

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------ Topics Covered:

0:00 Intro 3:30 Sam from Frax 7:50 The Stablecoin Narrative 13:45 The Central Bank Parable 24:45 Backing an Exchange Rate

28:10 Frax Analytics | What is Frax? 37:34 Frax Analytics | The Peg 42:30 Frax Analytics | Comparing 45:03 RSA Gets Frax-Pilled

49:42 MIM vs UST 53:16 The LUNA Token 56:41 Frax Roadmap | FPI

1:04:36 The 4pool 1:14:00 The Stablecoin Wars 1:18:35 What Happens Next? 1:23:20 Closing & Disclaimers

------ Resources:

Sam on Twitter https://twitter.com/samkazemian

Frax Finance https://app.frax.finance/

Decentralized Finance and the Debt Cycles https://academy.blue-swan.io/blog/decentralized-finance-and-the-debt-cycles

Market Share Chart https://www.theblockcrypto.com/data/decentralized-finance/stablecoins/total-crypto-backed-and-algorithmic-stablecoin-supply

Do Kwon’s 4pool Tweet https://twitter.com/stablekwon/status/1510021707377287170

----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research.

Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://newsletter.banklesshq.com/p/bankless-disclosures