Firstly, thank you for your proposal and your commitment to enhancing the Arbitrum ecosystem.
Introduction and Rationale
Frax aims to establish permanent capital flows into Arbitrum from Ethereum by incentivizing users of Frax stablecoins and staked ETH tokens. The request for a grant of 1.5M ARB (3% of the total available in the program) represents a thoughtful approach to enhancing Arbitrum’s competitive landscape. We see Frax as a comprehensive DeFi infrastructure, now moving beyond a decentralized stablecoin, with Arbitrum being a significant focus. Despite current low volumes on Arbitrum, Frax’s unmatched ability to develop its multi-layer suite of products gives hope for a broader initiative to incentivize liquidity on Arbitrum. We believe this proposal could lead to an increased presence of the Frax protocol on Arbitrum, benefiting the entire ecosystem.
Minor Concerns
- Effectiveness of the grant in its current size is uncertain for the entire Frax ecosystem
- Concerns exist about Frax’s ability to move Ethereum liquidity to Arbitrum effectively
Summary
Castle Capital appreciates the efforts put forth by Frax and the comprehensive DeFi solutions they offer to the Arbitrum ecosystem. We support the proposal in its intention to enhance the competitive landscape for Arbitrum stablecoin and staked Ether markets.
We hope that our feedback will contribute positively to the further refinement of this proposal for the greater benefit of the Arbitrum ecosystem. Your commitment to improvement and growth is clear and commendable, and we look forward to witnessing the continued success and evolution of the Frax protocol within the Arbitrum ecosystem.