[PR] dTRINITY Joins Forces with Frax to Advance Yieldcoin Looping on Fraxtal L2

Minh Nguyen
Sep 19, 2024
3 min read

SINGAPORE (September 19, 2024) — dTRINITY, a revolutionary stablecoin lending protocol with interest subsidies, is excited to announce a strategic partnership with Frax Finance. Specifically, dTRINITY will support the Frax Singularity Roadmap and deploy its protocol natively on Fraxtal, the first Ethereum L2 network with blockspace rewards.

At $650M in total supply, FRAX is the world’s largest decentralized stablecoin powered by algorithmic market operations (AMOs), similar to the Federal Reserve’s open market operations. In fact, Frax is the first DeFed project that attempts to replicate the Federal Reserve’s proven mechanisms onchain. The liquid staking version of FRAX, sFRAX, also provides users an embedded yield stream from real-world assets (RWA) and DeFi strategies. Additionally, Frax is the developer of Fraxtal, a highly scalable blockchain with built-in blockspace rewards called FXTL. Both users and applications on Fraxtal can earn FXTL for onchain transactions as a form of gas rebate and revenue sharing.

As the second DeFed project to support the Frax Singularity Roadmap, dTRINITY will incorporate sFRAX as one of the core reserve assets for its protocol-native stablecoin, dUSD. Set to launch in Q4 ’24 on Fraxtal as the genesis blockchain, dTRINITY will let users mint dUSD by locking FRAX at a 1:1 ratio which will then be staked by the protocol as sFRAX. dUSD can then be utilized for trading and yield generation through liquidity provision on various DEXs (e.g., Curve) or by supplying it to dTRINITY’s lending protocol. Most importantly, yields from the sFRAX reserves will fund ongoing interest subsidies (rebates) for dUSD borrowers, effectively reducing their net interest expenses while offering a more capital-efficient medium of leverage.

The interest rebates are particularly beneficial for yieldcoin loopers, i.e., borrowers who utilize cheap leverage through DeFi protocols to amplify their yields. Moreover, dTRINITY plans to redistribute its protocol-earned FXTL rewards to users on top of exogenous subsidies and protocol emissions over time, further lowering costs and enhancing yields.

To bolster liquidity, dTRINITY will deploy its own dUSD AMOs along with protocol incentives to support FRAX and sFRAX liquidity pools. Frax will also explore opportunities to provide strategic liquidity support for dUSD in the near future.

Kory Hoang, Core Contributor at dTRINITY: “Our full-reserve DeFed model allows us to utilize stablecoin float incomes in a way that can actively stimulate onchain activities, much like how the Fed reduces interest rates to drive offchain economic growth. By integrating sFRAX into our reserves and launching on Fraxtal, we’re able to offer dynamic interest rate reductions for borrowers through yield-backed subsidies as well as protocol and network incentives, creating a better medium of leverage within DeFi.”

Sam Kazemian, Co-founder of Frax: “Fraxtal was designed to be the bedrock for the next generation of DeFi applications. Our partnership with dTRINITY exemplifies the kind of user-centric projects that we want to support, setting new benchmarks for what’s possible and ushering in the DeFi Renaissance, together!”

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The information contained herein should not be considered legal, business, financial, or tax advice. Past performance is not indicative of future results. Digital assets and DeFi protocols carry significant risks, including the potential for complete loss of funds. By using dTRINITY, you acknowledge and accept these inherent risks. View our full Disclaimer and Terms to learn more about the risks involved.