Staked Frax USD

by Frax Finance

Current APY
3.90%
30d Avg APY
3.97%
90d Avg APY
4.11%
TVL
$31.9M

What is sfrxUSD?

sfrxUSD is the yield-bearing version of frxUSD, Frax Finance's stablecoin. It is an ERC-4626 vault where depositing frxUSD earns yield from Frax's diversified revenue streams. sfrxUSD is the evolution of sfrxETH staking concepts applied to the stablecoin domain, offering holders automatic yield accrual without active management.

How does sfrxUSD generate yield?

Yield for sfrxUSD comes from multiple sources within the Frax ecosystem. These include interest from Fraxlend (Frax's lending markets), revenue from Algorithmic Market Operations (AMOs) that deploy frxUSD across DeFi protocols for productive use, and income from Real World Asset strategies including US Treasury exposure. This diversified approach means yield is not dependent on any single source, potentially offering more stable returns over time.

Who issues frxUSD and sfrxUSD?

frxUSD and sfrxUSD are issued by Frax Finance, one of the pioneer DeFi stablecoin protocols founded by Sam Kazemian. Frax has been operating since 2020 and has evolved from a partially algorithmic model to a fully collateralized stablecoin. The protocol is governed by veFXS (vote-escrowed FXS) token holders. Frax operates a complex ecosystem including Fraxlend, Fraxswap, Fraxferry (cross-chain bridge), and multiple AMO strategies.

Risk profile

sfrxUSD has a moderate risk profile. The complexity of Frax's system, with multiple AMOs, lending markets, and cross-chain deployments, creates a larger attack surface compared to simpler vault designs. However, this complexity also provides diversification of yield sources. frxUSD's backing includes both crypto collateral and RWAs, providing a hybrid risk profile. Smart contract risk is present across multiple interconnected contracts. Frax has operated through multiple market cycles without major incidents, building a track record of resilience.

Peg and redemption

sfrxUSD can be unstaked to frxUSD at any time through the Frax app with no cooldown period. frxUSD maintains its peg through a combination of collateral backing, AMO operations, and DEX liquidity (primarily on Curve). The transition from partially algorithmic to fully collateralized has strengthened peg stability. frxUSD is widely available on major DEXs for instant swaps.

Key Risk Factors

  • Smart contract risk across Frax's multi-contract system
  • frxUSD depeg risk, frxUSD is backed by a mix of crypto and RWA collateral
  • Yield variability based on Frax lending and AMO strategies
  • Complexity risk, Frax uses multiple interconnected systems (AMOs, Fraxlend, etc.)

How to Get sfrxUSD

  • Frax Finance app (frax.finance), instant unstaking
  • Secondary market swaps on Curve and other DEXs
  • Stable Yields interface (0.1% Enso routing fee)

Details

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