[Discussion] Deprecate canonical FRAX

[Papi]

Hi All!

Today Frax Governance just voted “No” on the poll regarding deploying FraxFerry to Moonriver.
https://snapshot.org/#/frax.eth/proposal/0xaeb2f478d8d84e4ce1eb8f421e5ea002f5f021a9967b8fec8fe96ba4b97a9ab9

The vote seems controlled by one voter and there is no explanation as to why they voted against this proposal. This means that canonical Frax on Moonriver is unredeemable and the only way to exit Frax on Moonriver is to sell against the stableswap pool on Solarswap which is already significantly unbalanced (currently 80% Frax, 20% 3pool) with only 1 million $ of 3pool tokens in the pool.

This brings significant risk to Moonwell. Moonwell currently uses Chainlink for it’s Frax oracle but the problem is this oracle tracks the price of Frax on Ethereum and the price of Frax on Moonriver does not impact this oracle.

Frax on Moonriver is currently: 0.992 USDC
Frax Price on Chainlink is currently: $0.99904 USDC

As there is currently a supply of 12,701,090.09 FRAX on Moonriver, less than 1,000,000$ in exit liquidity this could present risks where if Frax depegs significantly on Moonriver there could be a situation where a user could buy Frax for a fraction of a dollar then borrow against it at dollar value on Moonwell, basically locking up all of the collateral on Moonwell backed by illiquid and unredeemable Frax.

I would encourage those engaged in the Frax community to push for answers

[FIP - 149] Deploy Fraxferry for a new chain ( Moonriver )

If there is no favorable outcome from the FRAX side of things the Moonwell community should strongly consider deprecating canonical Frax and potentially replace it with FRAX.multi (as Moonwell already has exposure to the multichain bridge)

[majin]

Thank you so much for bringing this to the attention of the Moonwell community. I’m personally surprised to see FraxFerry support for Moonriver get shot down in FRAX Governance like this, especially without explanation.

Thank you as well for sharing the link to the FIP-149 forum post. Understanding the rationale of the wallet that voted against this + what/any avenues the FRAX community has at their disposal (additional governance proposal?) would help inform the Moonwell community on the best path forward here.

[Papi]

Update:

Been pushing the FRAX guys pretty hard on the revote for FRAX moonriver bridge, unfortunately there is a lot of bureaucracy in frax governance and so they need to first vote on a revoting policy and then can revote on the frax ferry bridge for moonriver.

FIP Revoting Guidlines

This should go for vote soon, then the moonriver prop will be revoted on.

[majin]

Thank you for your effort here @Papi. Hopefully it will succeed on the second go around. Looks like the Revoting Guidelines are nearing quorum and are on the way to passing.

[majin]

The Frax Governance proposition re-vote to deploy FraxFerry to Moonriver is currently underway.

[majin]

The re-vote was successful and FraxFerry has been deployed to Moonriver!