Decentralized stablecoin project Frax Finance has passed a new proposal to advance the process of restoring the protocol fee switch.
“We propose to turn the protocol fee switch back on, with 50% of proceeds flowing to veFXS and the other 50% being used to purchase FXS and other Frax assets to be paired in the FXS Liquidity Engine (FLE),” Frax Finance said in Thursday’s proposal wrote. “FLE will allow Frax to continue building its balance sheet while significantly increasing the liquidity of FXS and its paired Frax assets.”
The proposal also details how a new token economic system would fully collateralize the decentralized stablecoin FRAX, in addition to suggestions for an enhanced revenue structure. Regarding its illiquid nature of the staking reward veFXS, “Once this proposal passes, veFXS stakers will receive full protocol fees, which will be added to the veFXS revenue allocator on the Ethereum mainnet, and soon to the veFXS revenue distribution contract on Fraxtal. "(The Block)