This vault optimizes yields for the Curve sfrxUSD/frxUSD pool through Convex Finance. The pool pairs Frax's base stablecoin (frxUSD) with its staked, yield-bearing version (sfrxUSD).
frxUSD: Frax's base USD stablecoin, fully collateralized
sfrxUSD: Staked frxUSD earning yield via ERC-4626 vault
sfrxUSD yield comes from:
Carry-trade strategies
Algorithmic market operations (AMOs)
IORB/T-Bill rate arbitrage
The vault continuously accrues value relative to frxUSD.
Pool Dynamics
This pool facilitates:
Swaps between staked and unstaked frxUSD
Yield arbitrage opportunities
Liquidity for sfrxUSD unstaking
Efficient entry/exit for sfrxUSD holders
Fee Structure
Standard Convex fees:
16% of CRV rewards
No deposit/withdrawal fees
sfrxUSD in LP Context
When sfrxUSD is in an LP position:
Continues earning Frax staking yield
LPs benefit from underlying yield appreciation
Creates interesting arbitrage dynamics
Pool ratio shifts as sfrxUSD appreciates
Risk Disclosures
Smart Contract Risk: Exposure to Curve, Convex, and Frax staking contracts.
Frax Protocol Risk: sfrxUSD yield depends on Frax's strategy execution. Poor strategy performance affects yield.
frxUSD Risk: While collateralized, frxUSD has Frax-specific mechanisms and governance.
Impermanent Loss: The sfrxUSD/frxUSD ratio changes as sfrxUSD accrues yield. This creates a form of IL, though predictable.
Yield Variability: sfrxUSD yield depends on which benchmark strategy Frax governance selects.
Governance Risk: Frax governance controls yield strategies and stablecoin parameters.
Disclaimer: APY and TVL figures are based on on-chain data and may fluctuate. Past performance does not guarantee future results. DeFi investments carry smart contract, market, and liquidity risks. This content is for informational purposes only and does not constitute financial advice. Always conduct your own research before investing.
Track sfrxUSD/frxUSD Convex Deposit performance and compare alternatives.
Track live yields, compare protocols, and build your DeFi portfolio with Fensory.