Frax CEO and founder Sam Kazemian suggests that the core team behind the decentralised finance (DeFi) protocol Frax Finance may soon decide to adopt Uniswap’s proposal, which is the top DEX, to give stakers of its native token a share of protocol fees. Declared
The utility token and governance of the ecosystem is (FXS). In exchange for locking their FXS, users obtain veFXS tokens, which let them maintain their governance and utility rights. On the Ethereum mainnet as well as natively on Frax Finance’s layer 2 platform, Fraxtal, the veFXS tokens can be staked. In a recent interview, Kazemian stated that the idea would include giving veFXS stakers a portion of protocol earnings. Revenue sharing will end in 2022, as decided by the community.
Uniswap suggested last week that holders of UNI tokens who stake and delegate their tokens should receive a share of the DEX’s fee income. The native governance token of Uniswap is called UNI. With the support of the crypto community, UNI saw a 60% increase in value. Value increases were also seen in a number of other DeFi tokens, such as COMP, AAVE, and SUHI.
“We will make the proposal in the same manner as Uniswap. The community will have to approve it, according to Kazemian.
Similar to the interest earned on fixed-income instruments, staking is the act of locking cryptocurrency for a predetermined amount of time in exchange for a specific percentage of rewards that sustain the operation of a blockchain. Voting rights granted by governance tokens to delegates—recognized decentralised autonomous organisation entities—are transferred through delegation.
“Should holders of veFXS vote to return earnings from the Frax Protocol to veFXS stakers? Currently, the majority of Frax Finance’s eight-figure annual revenue is being saved in the treasury. Time to turn it back on?” Frax Finance asked on social media platform X, indicating that a fee-switch proposal was soon to be considered.
The social media post received positive feedback from a number of cryptocurrency market participants, such as the anonymous analyst Ignas and the decentralised exchange Curve, which focuses on stablecoins. Following the release of this data, FXS increased by as much as 17% to $9.87.