Add sfrxETH Market on Ethereum

Frax Finance is seeking community support for adding sfrxETH market to Compound V3 on Ethereum Mainnet.

Token Asset Name

Frax Staked Ether - sfrxETH

A description of the project and the token

The world’s most innovative decentralized stablecoins and DeFi stablecoin infrastructure.

The Frax ecosystem is a self-sufficient DeFi economy utilizing stablecoins as currency.

Frax Ether is a liquid ETH staking derivative and stablecoin system designed to uniquely leverage the Frax Finance ecosystem to maximize staking yield and smoothen the Ethereum staking process for a simplified, secure, and DeFi-native way to earn interest on ETH.

The Frax Ether system comprises three primary components, Frax Ether (frxETH), Staked Frax Ether (sfrxETH), and the Frax ETH Minter:

sfrxETH is a ERC-4626 vault designed to accrue the staking yield of the Frax ETH validators. At any time, frxETH can be exchanged for sfrxETH by depositing it into the sfrxETH vault, which allows users to earn staking yield on their frxETH. Over time, as validators accrue staking yield, an equivalent amount of frxETH is minted and added to the vault, allowing users to redeem their sfrxETH for a greater amount of frxETH than they deposited.

The exhange rate of frxETH per sfrxETH increases over time as staking rewards are added to the vault. By holding sfrxETH you hold a % claim on an increasing amount of the vault’s frxETH, splitting staking rewards up among sfrxETH holders proportional to their share of the total sfrxETH. This is similar to other autocompounding tokens like Aave’s aUSDC and Compound’s cUSDC.

Benefits to Compound Community

The adoption of sfrxETH on the Compound lending protocol presents numerous benefits to the Compound community. By integrating sfrxETH, which is among the top 5 available Liquid Staking Derivatives (LSDs), Compound will enhance its offerings, providing users with more diverse and yield-generating opportunities. This addition would not only attract a broader user base but also increase the protocol’s total value locked (TVL). Moreover, sfrxETH’s integration brings the advantage of deep liquidity and robust security features, ensuring a resilient and efficient lending and borrowing environment.




FrxETH Data: Frax Facts


Telegram: Telegram: Contact @fraxfinance

Discord: Frax Finance


The proposal author & their contact info

Telegram: @jaeyunyi - APAC Growth Lead

Market Risk Assessment

Market Cap of the token*

$629,264,421 USD

Minimum and maximum market cap of the token within the last 6 months.

Minimum:454.66 Million USD

Maximum: 831.56 Million USD

Market Cap of token on Comet markets


The largest exchanges where the token is listed and its respective liquidity*

Balancer v2 (Ethereum): $11,356,052
It should be noted that frxETH (the underlying asset that sfrxETH is always redeemable for is highly liquid with many Curve pools making sfrxETH have over $100m+ of liquidity. A simple search of Curve pools shows that frxETH is one of the most diversly liquid ETH-pegged assets on mainnet:

  • The largest smart contracts balances of tokens and what those contracts do.
  1. 0x78bB3aEC3d855431bd9289fD98dA13F9ebB7ef15

Fraxlend Pair - FRAX/sfrxETH : 46k sfrxETH

  1. 0xf69282a7e7ba5428f92F610E7AFa1C0ceDC4E483

Prisma CDP : 32k sfrxETH

  1. 0x8CA7A5d6f3acd3A7A8bC468a8CD0FB14B6BD28b6

EigenLayer: 25k sfrxETH

  1. 0x3fF8654D633D4Ea0faE24c52Aec73B4A20D0d0e5

OUSD CDP: 14k sfrxETH

  1. 0xfA96ad0a9E64261dB86950e2dA362f5572c5c6fd

LLAMMA - crvUSD AMM: 7k sfrxETH

  1. 0xC2545C68a71F6803264bdE885870fD72D361fB9E

Prisma: 5.7k sfrxETH

  1. 0xBA12222222228d8Ba445958a75a0704d566BF2C8

Balancer Vault: 4k sfrxETH

  • Provide the volatility of the token. Rolling windows of 1,3,6 & 12 month periods would be ideal. For more info see Gauntlet’s volatility guide.

1: $1909 / —

3: $1978 / 1.036

6: $2051 / 1.037

12: $3384 / 1.65

Total supply*


  • Emission schedule.
  • N/A

Note: Gauntlet will also pull live data to conduct their market risk assessment after the Checklist is submitted.


  • How is this asset distributed amongst token holders? List the top 10 holders, the percentage of each holder, and tag any of them if they are known.*

1 0x78bB3aEC…9ebB7ef15

38,904.39158709664416658 26.4871%




29,270.531374387379303272 19.9281%




5,129.826744591435526404 3.4925%




4,133.935417675978983234 2.8145%




3,989.215099052143146724 2.7160%



Frax Finance: Comptroller

3,745.050546977374473546 2.5497%



Balancer: Vault

3,018.396007890955725633 2.0550%




2,523.00481214458602703 1.7177%




2,129.439478224750985932 1.4498%




2,000 1.3617%


  • List all of the privileged roles in the token contract. This can include whitelisted EOAs, Multi-sigs or DAOs.*
  • It isn’t owned.
  • Is it pausable?*
  • No
  • Does it have a blacklist or whitelist?*
  • No

Smart contract risks

Codebase & On-chain Activity:

  • Provide a Github repository for the underlying token contracts*

Provide a test suite with code coverage.

Security Posture:

  • What audits, if any, were performed? Provide links to the reports if they exist.*

List additional security and formal verification tools used in development


  • List all monitoring services used by the token, if any.
  • Misc backend / validator monitoring tools

Multi-Chain Strategy

  • Will the token include implementations on other networks*?
  • Yes

If so, will the tokens be natively minted on the other networks or bridged across?

Bridged. OP-style L1StandardBridge/L2StandardBridge for Fraxtal, Fraxferry for the rest.
It should be noted that sfrxETH is NOT a bridge vulnerable on Ethereum mainnet. That means it has zero bridge requirements and is a fully natively issued token on Ethereum mainnet. No bridge hack/vulnerability would affect the supply or minting of sfrxETH. So for Ethereum lending integration, the token is extremely safe.

Are there any mitigations in the contracts in case a bridge becomes inoperable or compromised?

We control both bridges and presumably would do a Snapshot/airdrop or similar scheme to compensate affected users. We can pause the bridges too.

Token contract Behavior:

  • Does the token have more than one address1?*

No, not a proxy either

  • Does the token use a compiler version greater than 0.8.0 or the SafeMath? If not, explain how the protocol deals with possible overflows and underflows*
  • v0.8.16+commit.07a7930e
  • During the execution of the token’s functions, does the token execute external code chosen by the caller or receiver?2 If so, please explain the reasoning behind this decision*
  • No
  • How does the token contract deviate from a standard implementation of ERC20? Any additional features that the Compound DAO should know about?*
  • Is it burneable?*
  • It is ERC-4626. It cannot be burned, just redeemed for frxETH
  • Does the token contract have a fallback function? If so, when does it revert?3
  • Contract is not payable
  • Does it have a fixed supply? If no, who can mint?*
  • No. ERC-4626 so people can convert/redeem frxETH <> sfrxETH.

Is it a rebasing token?*


  • Does the token charge fees on transfers?*

  • No

  • Does it implements any transfer hooks? Or hooks on any method?*

  • No

  • Is the contract performing arbitrary delegatecalls?* If the answer is yes, indicate who can make these calls and to what contracts.

  • No

  • Is it flash mintable? If yes, please provide more information on this feature*

  • No

  • Is it flash loanable? If yes, please indicate who offers the service.*

  • No

  • What are the typical gas costs for calling each of the standard ERC20 functions?

  • Redeem: 93.1K, Transfer: 44.7K

Price Feed Behavior

  • Is the price feed supported by ChainLink?
  • No.

If not, what entity is responsible for posting price updates? List names and addresses which may update the price feed

SfrxEthFraxOracle: SfrxEthFraxOracle | Address 0xb9af7723cfbd4469a7e8aa60b93428d648bda99d | Etherscan

  • How often will price updates be posted?

  • sfrxETH oracle is onchain and completely decentralized, anyone can ping for the most recent price but an offchain oracle job always updates either once every 24 hours latest or 1% deviation. Additionally, the oracle is bounded at .70 ETH price to prevent manipulation since sfrxETH is always redeemable and fully backed by frxETH→ETH.

  • At what price difference threshold will price updates be posted?
    1% deviation.

  • Can the AggregatorV3Interface functions for this price feed ever revert when called?

  • Does the bytecode of the custom price feed match an audited version?


  • Is it upgradeable?* If so:
  • No

Who is authorized to make an upgrade?


Can an upgrade happen instantaneously or is there a time-lock delay?


Which components are upgradable?


How does the upgradeability design work? Who manages it and are how upgrades performed?


Does it emit an event when the implementation is updated?


Initial Requirements

Set collateral factor to 0.70

Set established supply cap if necessary. Supply cap and collateral factor determine total borrowing power, and maximum liquidateable amount for the token.
20,000 frxETH

As a old, but not current user of Compound, I hope the protocol community is positive and consider adding a sfrxETH market.

I think this would be a good partnership, which also brings a interesting product I want to use to the platform.


Compound needs novelty to attract more capital to it

1 Like

[Gauntlet] sfrxETH Asset Recommendation on WETH Comet on Mainnet

Simple Summary

Gauntlet recommends listing this asset within the existing WETH Comet with the following parameters:

Parameter Value
Collateral Factor 80%
Liquidation Factor 85%
Liquidation Penalty 10%
Supply Cap 5,000

DEX Liquidity on Ethereum

Dex Category Pool address TVL(mil)
balancer_ethereum 0x42ed016f826165c2e5976fe5bc3df540c5ad0af7 7.63
curve 0x2570f1bd5d2735314fc102eb12fc1afe9e6e7193 6.85
balancer_ethereum 0x5aee1e99fe86960377de9f88689616916d5dcabe 4.72
curve 0x3772ba91b46f456ae487cb0974040c861c045810 0.36
curve 0x745213a540c932425d9c8cbc2b9bfb796c759e2f 0.09
kyberswap_elastic 0xd9eeaba515824e53e52b6ec21a7e465ed6d37a78 0.03
uniswap_v3 0x77558f80aee6a420bccc9380d2f2c0ea823e1d81 0.02

Total TVL: 19.70mil

The Balancer and Curve LPs for sfrxETH are paired with other LSTs rETH and wstETH.

sfrxETH is a ERC-4626 vault designed to accrue the staking yield of the Frax ETH validators. sfrxETH can be swapped for the underlying frxETH atomically using the ERC-4626 vault contract. As shown in this liquidation event with sfrxETH collateral, liquidators will exchange sfrxETH to frxETH to capture more liquidity to swap to ETH. As such, Gauntlet is accounting for frxETH’s 159M TVL liquidity when making this recommendation.

Use of Exchange Rate Oracles

If exchange rate oracles are implemented, Gauntlet can recommend more capital efficient parameters as the asset remains insulated from market movements, although exposes it to tail-end risks. The exchange rate based risk parameters could facilitate higher caps and Liquidation Factors along with more conservative Liquidation Penalties. Gauntlet supports exchange rate oracles for sfrxETH within this correlated Comet if the community decides to move forward with this strategy.

Yield Risk

The yield from staking ETH and earning sfrxETH can be volatile and is influenced by various factors such as validator performance, network conditions, and staking competition. Yield rates can fluctuate, and there is no guarantee of consistent returns. Gauntlet would like flag this potential risk to the community.

Next Steps

We welcome community feedback.

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