Frax Finance Considers Fee Sharing with Users, FXS Surges

The core team of the prominent DeFi project on Ethereum, Frax Finance, is considering sharing a portion of the protocol's revenue with users who stake veFXS tokens.

CEO's Inspiration

Sam Kazemian, the founder and CEO of Frax Finance, mentioned that this idea is inspired by last week's proposal from Uniswap. The proposal suggested that users who delegate or stake UNI tokens could receive a share of the transaction fees from the exchange.

FXS is the utility and governance token of the Frax ecosystem. Users who lock up FXS receive veFXS tokens, allowing them to retain utility and governance benefits. veFXS can be staked on Ethereum mainnet and on Frax Finance's layer-2, Fraxtal.

Staking and Revenue Sharing

Staking involves locking a certain amount of tokens in a blockchain to earn rewards. These rewards depend on the initial investment, including the number of tokens and the duration they are staked. Frax Finance's latest idea is to share the protocol's revenue with those staking veFXS. Previously, in 2022, the community voted to stop revenue sharing.

Community Reaction

Although both Uniswap's and Frax Finance's proposals are not yet officially implemented and require further snapshot votes, they have received enthusiastic support from the community. This has led to a significant increase in the prices of UNI, FXS, and several other DeFi tokens like COMP, AAVE, and SUSHI.

Market Response

At the time of writing, FXS is trading around 9.8 USD, representing a nearly 20% increase from the initial 8.4 USD following the news.

FXS/USDT 1-hour chart on Binance as of 04:55 PM, February 26, 2024.