Frax Finance dives into DeFi liquidity with $250M USDe allocation

Decentralized finance (DeFi) lending protocol Frax Finance recently approved a community governance proposal that will allow Etena Labs to allocate $250 million to a new liquidity pool.

As part of Frax's Singularity Roadmap, the proposal allows for the creation of an Automated Market Mechanism (AMO) to create new FRAX tokens backed by leveraged debt. The proposal was approved on April 5.

The proposal would create one of the deepest liquidity pools in the DeFi space and allow Frax to expand its leveraged product, Etena Labs wrote in an April 8 X post:

“Starting yesterday, FRAX has started adding USDe POL, which is generated on-chain from the deepest dollar funds and FRAX can improve their source of support products.

According to Curve Finance, the new Curve-based liquidity pool holds $44.9 million worth of liquidity as of 10:45 UTC, with $30.6 million in FRAX coins and $14.6 million in USDE synthetic dollars.

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Etena Labs surpasses $2 billion in TVL

USDe crossed the $2 billion mark in total value locked (TVL) on April 6, less than two months after it launched on the mainnet on February 19, according to Athena Labs.

According to its homepage, the protocol is currently offering an annual percentage yield (APY) of 37.1% in USD to more than 125,300 investors.

Etena Labs made headlines last week after announcing that it was adding Bitcoin support to the USDe synthetic dollar to grow beyond its current $2 billion supply.

Athena Labs became the highest earning decentralized app in crypto when it offered 67% APY on USDe.

Following its success, Athena has attracted the attention of large investment funds, becoming the biggest delinquent bet for Delphi Ventures for the current cycle.

Writing on April 2, Jose Maria Macedo, CEO of Delphi Labs and founding partner of crypto investment firm Delphi Ventures, said that USDe could become the largest dollar-backed asset after Tether (USDT) and Cirque Dollar Coin (USDC). posting

“sUSDe offers the highest dollar yield in crypto by volume. USDe will be the largest stablecoin outside of USDC/USDT in 2024. Etena will be the highest revenue generating project in all of crypto.

Related: Athena Labs Founder Explains USD Stability Amid High Yield Worries