Frax Finance recently presented its ambitious strategy to grow the Total Value Locked (TVL) on layer 2 blockchain to $100 billion by the end of 2026. This move represents unrivaled ambition and innovation in the decentralized finance (DeFi) sector. TVL in Fraxtal is currently at $13.2 million, indicating tremendous growth potential, based on statistics from DeFi Llama. Launching 23 layer 3 protocols in less than a year and introducing new assets like FRXNEAR, FRXTIA, and FRXMETIS are all part of Frax Finance’s creative strategy. Sam Kazemian, the founder of Frax Finance, highlighted that layer 3 protocols will be essential in giving decentralized apps an infrastructure that is both flexible and well-run on top of layer 2 scaling solutions.
Reactivating the protocol revenue sharing mechanism is another suggestion made by Kazemian to fortify the ecosystem and improve liquidity. In accordance with this plan, a protocol fee switch will be activated, 50% of the proceeds will be given to veFXS, a governance and utility token derivative, and the remaining 50% will be used to buy FXS and other Frax assets. The FXS Liquidity Engine (FLE) will couple these assets in an effort to strengthen Frax’s balance sheet and greatly boost the liquidity of associated assets. Its goals to increase returns on staked Frax and fully collateralize the Frax stablecoin (FRAX), which is already one of the top ten global cryptocurrencies with a dollar theme.
Interestingly, FXS has dropped 14% since the start of the year while seeing a 2% uptick in the last 24 hours. With a total TVL of $100 billion, the recent spike in DeFi popularity is the biggest since March 2022. The surge in Bitcoin value that followed the US debut of spot Exchange-Traded Funds (ETFs) for the cryptocurrency is responsible for this increase in TVL.
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