Frax Finance, a decentralized finance platform, is following in the footsteps of Uniswap by proposing to allocate protocol fees to stakers. This news has caused a surge in the price of their governance token, FXS, which reached highs of $9.64 and could potentially break above $10 if bullish momentum continues.
In an interview with CoinDesk, Frax Finance founder Sam Kazemian revealed their proposal, which was hinted at in a tweet on February 23. The proposal suggests distributing the platform’s annual revenue, which is estimated to be in the eight figures, back to veFXS stakers.
This move is similar to the one made by Uniswap, whose token saw a significant increase in value after announcing their revenue share proposal. Despite a previous proposal being rejected by the community in 2022, the current outlook, led by Uniswap, has a higher chance of being accepted.
If the proposal is approved, FXS holders can lock their tokens for veFXS, which would entitle them to a share of the protocol’s revenue. VeFXS can be staked on both the Ethereum mainnet and Fraxtal, the layer-2 protocol of Frax Finance.
FXS has already seen a surge in price, reaching highs near $11 on February 5 and hitting $9.64 today. With the overall DeFi market experiencing a boost in prices due to Uniswap’s success, FXS could potentially reach $12, the resistance level from March 2023, and even aim for its all-time high of $42.80 from January 2022. On the downside, primary support levels for FXS are at $8 and potentially $7.
In conclusion, Frax Finance’s proposal to distribute protocol fees to stakers has caused a surge in the price of their governance token, FXS. With similarities to Uniswap’s successful revenue share proposal, FXS has the potential for further gains, potentially reaching its all-time high. On the downside, support levels are at $8 and potentially $7.
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Categories: Decentralized Finance, Governance, Revenue Sharing
Tags: Frax Finance, FXS, Uniswap, DeFi, Staking, Protocol Fees.
