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Hey everyone, welcome back to Web3 Founders World Talk. We're here to bring you very captivating conversations with movers and shakers in Web3 industries. Today we have Andy to our show today. He is the director of Asia on Frax Finance. Welcome to the show, Andy. Thank you. Thank you for having me, Blair. Really happy to be here to speak on behalf of Frax. Would you mind telling us a little bit about yourself and your project?
For sure. My name is Andy and I currently serve as the Director of Asia at Frax Finance. I oversee a lot of things at Frax Finance, anything from managing the community, seeking up business development opportunities at Frax Finance, especially focusing on Asia, going around to different conferences to do panels and get that Frax Finance and stablecoin maximalism narrative out there.
So to give a quick, I guess, introduction about Frax, we basically do stable coins. We issue innovative and decentralized stable coins and also build sub protocols to kind of support them.
Wow, impressive. I'm pretty sure Frax is one of the leading DeFi protocols in the space. And also, would you mind telling us a little bit about yourself? Like personally, how did you land in crypto space? For sure. Yeah, super interesting story actually. I have no crypto or blockchain background when I first started. But
I remember back in the day, I think in Korea, it was like 2017 or 2016 when Ripple was at like $3 or it was like at all time high. And my cousin was like, you know, this is when you need to get in. So I bought a bunch of Ripple at like all time high and I'm still holding it. And then from then, I actually got an interesting offer from a friend of mine to kind of
you know, do like part-time, um, translations and communication between the English office and the Korean team. Um, so starting from there, I started to really learn about crypto because, um, basically Frax, um,
the founders also founded a product called IQ Wiki and that's where I started. So IQ Wiki was actually founded before Frax. And that's the IQ Wiki was all about learning and education and, you know, learning about crypto and blockchain space. So it was very gradual for me to kind of, uh,
learn and earn to kind of go as we you know as the time went so that's how i kind of got into the space and then you know i stuck with the team for a couple of years because i think um i truly believe that they are the best team in the space um really brilliant brilliant people and you know great people who are very patient with who i was before and even now and always kind of helping me learn and you know really dive into the space and better for sure
Wow. Interesting. It seems like you experienced the speculations of the crypto space and also the application side of it.
It's very interesting. Well, let's just jump straight in. Since, like I said, Frax has built very comprehensive DeFi economy based on stablecoins, including very comprehensive product lines like equity systems, lending markets, FraxSwap, FraxLand, liquid staking, like FraxEthers.
We would love to know what actually inspired your team to create such a diverse and extensive set of DeFi protocols in the first place. Yeah, that's a great question. As you mentioned, a lot of our sub-protocols, we do have a lot of things going on in our ecosystem. I think you mentioned FraxSwap, FraxLend, our LSD FraxEther. There's also FraxFairy. So there's a bunch of things. And I think the motivations...
around in terms of building this as of now is that we currently actually issue three different types of stablecoins as well. So there's Frax, which is a USD pegged asset, FPI, which is Frax price index stablecoin. And that's the first stablecoin actually pegged to a basket of consumer goods, which is creating its own unit of account separate from any nation state denominator money.
And as you mentioned, Frax Ether, which is pegged to Ethereum to use as a replacement for Wrapped ETH in smart contracts. So we built sub protocols around them to actually support our stability mechanism. FraxSwap is a native AAMM, which is also the first AAMM to have time-weighted average market maker
built into it, FraxLend, which is a permissionless lending market. And FraxFerry, the safest way to kind of transfer and ferry the Frax-based tokens. And I guess I'll dive more into it later, but coming back to your original question, the motivation is that
Issuing these three different stablecoins and the sub protocols, we believe that in the future that there will be three main dominant assets kind of in the next wave that dominates the entire industry. So which is I guess I'll go a little bit into it more now. So going back to our three stablecoins, we think that USD will obviously dominate, which is why we issued Frax.
And then some kind of flat coin such as, you know, there's like, you know, CPI basket of goods, which is why we issued FPI. And then, you know, big blue chip assets and crypto such as Bitcoin or Ethereum. That's why we issued Frax Seed. And then around that, obviously the sub protocols that we've kind of mentioned and talked about to kind of support that and support the stability mechanism.
Well, I would say I can tell like FRAX has been like expanding into like multiple like defined verticals. Like you mentioned, there are a lot of product to name. It actually could bring like I would say I would assume like a massive development and the maintenance pressures. Have you guys encountered any like notable challenges? And also what aspects are currently the major focus for your team right now?
I think on the development side, I don't want to speak too much for our development team, our core team, but the vibe that I got from working with this team is that they are builders, right? So, um,
a lot I get a lot of questions about, you know, how do you guys deal with bad market bear markets and horrible market situations? And the truth is, you know, for me, even if it's hard to kind of get that entire noise out and to ignore that whole, you know, negative narrative. But
It's really motivating to see our core team build around that and just focus on building great, great products so that when the next bull market comes, there's all these amazing products that they've launched. And I guess on the outer spectrum of development, I think it's very safe to say that everyone in DeFi or in general in the crypto space has encountered challenges such as frequent bridge hacks that happened last year's.
some deep pegs of different stablecoin protocols.
And actually through this bridge hack, it was actually a learning point and curve for us and a motivator for developing FraxFairy, which is actually the safest way to bridge over Frax assets. It does take longer than other bridges, but we value safety of user assets than the timely aspect of things. So we love to learn through
you know, mistakes and different, you know, parts of kind of hurdles and challenges that other protocols might have faced and just terms of the space in general.
Yeah, I can tell you guys are like, like extremely bullish on stablecoins. That's why you guys have developed like stablecoin empowered like DeFi infrastructure and like flexing wall from like a single gold stablecoin. Then there are two. There are a lot of the very comprehensive ecosystem that we are trying to build also accompanied by a continuously expansion and innovations.
Managing those transitions requires very insightful strategies, like you said, like in this space in particular. Well, personally, I find it really dynamic
fast pace. Also, sometimes more barred as well. So there are always a lot of distractions happening and you have to be really selective on those trains or the product that you would like to build. Can you also shed light on how your team navigated those insights and developments, also innovations and your ultimate missions and vision as it's pushed the boundaries of the industries?
For sure. Yeah. So I think one notable thing that I can mention here is that our core team, as I mentioned, are builders, but they also really look and do research around other, you know, respectful and notable and crypto native projects. And we're on that look for, you know, how can we do something better? How can we learn from different projects?
So that's one way I think that Frax really stays on top. And we really focus on this positive sum narrative where we learn and we move up together as the entire space rather than seeing other projects as competitors, which is one other respectful thing that I have for the team.
But our ultimate vision is to kind of become one of the top DeFi projects and become like the leading stable coin for each dominant assets that I mentioned before that we think in the next decade, we think that it's going to happen. And our main focus, going back to the previous question actually that I forgot to answer, is definitely Fraxtel.
We want to expand this vision of the dominant asset vision to create a chain where the entire DeFi space can grow. It's going to be something completely different, something that no one has ever done before. So we're very excited to launch this product. And it's super interesting because I think it's coming very soon. I mean, the date right now of the recording is very close to the launch date, so we're pretty excited.
Yeah, since you talk about the Fraxhole, that would be our key focus today. So I guess there's a considerable excitement surrounding the upcoming launch of Fraxhole, that's the way you name Fraxchain.
and the potential expansion of the FRAX LSD as well. I captured that from your 2024 roadmaps. Can you share more insights into the current stage of this product? You answered my questions partially, like what motivated FRAX to develop its own layer 2 solutions?
but not sure if you have any other insights to add on. Also, can you provide some brief overview, like a sneak peek of its architecture and the functionalities, what we're waiting for?
For sure, yeah. I think I can go a bit deeper into this question. I guess as mentioned previously, it's kind of to bring everything together. It's kind of our end game, one of our end game visions to have our Frax to launch. And right now, in terms of the development stage, we're very close to launch. So we're actually going to announce it on February 7th.
And some snapshots about the Fraxtel points and airdrops are going to be happening on that date as well. And to kind of go into a brief overview of the architecture, I guess it's going to be a general purpose chain with scaling. So Fraxtel is going to be a general purpose blockchain similar to other layer two solutions like Arbitrum or Polygon. And the scope of Fraxtel is...
I likened to that established roll-up solution like Arbitrum, Optimism and ZkSync. However, it's not just an application specific chain, AKA App Chain. It's a comprehensive technology stack with a broader ambition than other roll-ups currently launching App Chains.
And another thing that we can highlight is modified OP stack and superchain compatibility. Sounds very complex, but the initial vision of Fraxtel was a modified OP stack execution environment compatible with superchains, facilitating the deployment and development of decentralized applications.
And then the long term roadmap is kind of to become a base layer ZKL1. So that's the long term kind of goal there. And the gas token flexibility, we can talk about that. We plan to use both FraxEth and Frax as gas tokens, which means that both of these assets will be unstaked and extra yield will be passed on to XFRAX and XFRAXEth holders.
Split mint, government and gas can be also, I guess, a talking point here. So while FraxETH and FRAX will be used as gas tokens on FraxToll, governance on the other hand will be controlled by VFXS holders. So this separation will kind of be key to long-term growth, we believe, as network profits will flow back to VFXS, while increased network usage would drive more towards FraxETH to be deposited on FraxToll.
And one actually really cool thing that we like to highlight is blocked space incentives. So this is a new, kind of a brand new type of incentive structure that will reward users and apps and developers using the network. So this rewards, the reward is going to be paid out in VFXS.
So if you're a developer who are building amazing apps or products on Fraxtel and a lot of people use it, you will not only earn the app revenue, but also block space incentives, which will increase profitability and alignment of the app for long-term growth with Fraxtel. So I think this is really key here for builders out there who are interested in building in Fraxtel.
because it not only incentivizes them, but it incentivizes the space in general. And I guess in the future, we plan to launch special FXS gauges. And one super bullish thing I personally have is something called BAM.
So I'm not sure if you've heard of it, but it stands for Borrowed Automated Market Maker. So I think this is potentially the most innovative DeFi advancement to be released in 2024. So it's actually coming, I would say, pretty soon after the Fraxel launch.
So this is like a new borrowing facility built on top of locked liquidity pools, which will open new avenues for lending and allowing FRAX to draw on a liquidity to backstop the protocol. So this is going to be super interesting.
I guess one offer that I can drop here that I can drop here is that it's going to be launched within maybe one or two months of Frax still going live. So I guess you can say like one or two months from today. Wow. That sounds very, very exciting and looking forward to, you know, seeing all those kind of stories coming true. And it sounds like it's going to be really prolific year for Frax Finance. Well, it's going to be a fun ride. We will see.
Well, yeah. Well, I don't want to be a bummer because here's my next questions about maybe more about like competitions, because like you said, there are a lot of like scaling to solutions now, like ZKOPs and also other kind of scaling solutions happening in the space. Like how has Frexfinance strategically engaged with its crypto community to drive adoptions?
I know you guys have been doing pretty well, but now you are having your layer 2 solutions now, so it sounds like you're going to have to compete for developers, for users. Can you also share some specific initiatives that attract both users and developers to the Frax ecosystem in the near future?
For sure. Yeah. I mean, I think the Frax optics is kind of about purely about innovation and building. And the way we were, the way the core team really sees it is that we see in very long term, right? So, you know, short term to long term, you're ranging from three months to the next decade even. And we always like to question ourselves, you know, what will be, you know, the next essential unit of account, stuff like that. What will be the next,
you know important stability mechanism in the next decade or two what might change what might not um so we we look at you know what's new and innovative in the space um in the lens of a stable quinn maximal maximalist centric view um so we kind of um really utilize that and like i mentioned before it's not all about building but really kind of acknowledging what's going on around in the space
And we really like to, I think that really drives a lot of users for us that we really try to reach that innovative kind of narrative when we're building. So we're building out things that has never done before and we don't hide that, right? So we like to have that so that other protocols can maybe look at it and learn from it. And that's what we do as well. We look at innovative protocols and we learn from that.
And for example, like the reason why we've been using and why we've been so huge on Curve for a very long time is that we believe that the Curve stable swap technology is literally the ultimate mint and redeem function. And that's ever been created by crypto. We think that it is the greatest and the most mathematically elegant and mint redeem smart contract that has been designed in crypto. So working with these really crypto native and innovative companies
projects and kind of partnering with them really helps us grow as well. And again, it's about that positive sum game. So I think that really helps us drive adoption in terms of like, you know, retaining users or bringing more people onto Frax, but more importantly, building up the entire ecosystem and the space in general. Yeah, I guess everyone in this industry can tell.
that spirit that you guys are holding and you guys accumulate a lot of users based on this mission and you guys sharing the same goal so that's why you drive a lot of users to your game and those people retaining your ecosystem so that's something good to see. Well, your team has been praised for its delivery capabilities and product safeties. As you mentioned, there are a lot of risk factors in different sectors but
From my observations, you guys are doing pretty well.
Well, are there any insights or lessons? Because I don't really want to call out specific protocols here because there are a lot of entrepreneurs that are experiencing some sort of challenges or resistance previously. But are there any insights or lessons learned that you would like to share with other builders in a device space? Like how can you manage this high quality delivery capabilities? Plus,
product safety in particular. Yeah, I think in terms of like Rax as a stable coin, we really, really focus heavily on stability mechanism. And I think I mentioned that word so many times in this podcast already, but I think that's one key thing that all stable coin products focus
um usually focus on so um having that stability mechanism and having different sub protocols to kind of accommodate that um is is something that we've learned and developed throughout the years that we've you know kind of experienced the space and i think one super cool thing that we have something going on is really about that positive sum game
As I mentioned before, we don't see other projects as competitors, but we really like studying it and seeing what they do and seeing different new startups grow or existing projects do innovative things. And that's where we kind of take insight and learn from it. And I hope that other products are learning from Frax as well and what we do, but we're constantly building and constantly innovating and learning.
And in terms of stability mechanism, for example, you can see that we used to be fractionally algorithmic, but learning from different projects and et cetera and what's been going on, we decided to retire that and go into fully 100% CR projects.
So stuff like that, I think, is what really keeps us in the space and kind of helps us develop some, you know, that safety aspect of what Frax does best.
So it sounds to me, it's like your, your secret recipe would be like keeping yourself up to date because like you guys are doing a lot of like this competitor analysis. Well, this is not going to be like, like direct competitors, but you guys are doing such a comprehensive analysis based on the trains, based on the products, based on other innovations. And you guys will be like kind of like selective and,
and absorbing those kind of things to your particles. I think that's really impressive. That's really amazing because
Yeah. Like we said that, you know, entrepreneurs need to be really selective and like strategic when they make decisions. Yeah. Yeah. So I think we have like, you know, we obviously our team has our own, own like ideas and plans and what's going down the line, but it never hurts to kind of look around and really do research and learn from other. Yeah. So I think it's, it's just about, you know, helping each other out as well. So I think that's something that's important in this space.
Yeah, yeah, agree. Especially the whole industry is still very nascent to me. It's taking off. It's now with all those Bitcoin ETFs, we're driving a lot more adoptions. But now there is no distinction between, oh, you're doing yourself. I'm doing my own job here. It's more like a widespread community that we're trying to build together.
So yeah, that's something I'm siding with you as well. Well, other than that, are there any other product features to expect in 2024? Because I saw you guys, this close to your 2024 roadmap. Are there any other things that you would like to call out today?
I think the main focus in 2024 would be Fraxtel, right? So we're not just going to launch Fraxtel on February 7th and then call it a day. We're going to constantly upgrade it and constantly working on to making this
Making Fraxel something that's like next level. Along with that, I think there has been talks in the community you can check, I think, about how FPIS, which is the governance token of FPI and FXS, there's going to be a merge.
So this is something that I think there's going to be a snapshot proposal about and discussions around. So that's something that's pretty interesting that might be coming, I think, pretty soon. And then, like I mentioned before, BAM is super cool. I think that's going to be a game changer for sure.
And as I mentioned, from continuation and development in Fraxtel, Frax ETH v2 is also coming, which is going to be completely permissionless. So again, there's so many things going on, but I can say that the main focus would be Fraxtel, I think, in 2024.
Yeah. How can you guys manage such workload? It sounds like you're going to have a 100 or 200 people team to me. You're having so many verticals to cover. For sure. Yeah, I mean, it's actually super interesting that you mentioned that. Our team is actually, our core team is actually, I think, as of now, under 10 people.
Wow. So, yeah, so a genius is a very few geniuses just working around the clock to really ship these amazing products out, which is, again, another reason why I respect them so much.
And I think that keeping the team lean also helps keeping that same vision and focus without diluting the vision or creating extra noise that can be a disturbance. So I think that's something that really works well in the Frax team as well. Wow, that's a really impressive...
So you guys must be really focused and like all in, like throwing, I just want to get this done kind of vibe, super outcome oriented. Well, I'm just picturing your team profiles right now. Yeah, for sure. Yeah. Well, I guess your CEO actually mentioned that, you
you know you you guys want to make fx to become one of the top five cryptocurrency projects i would say this is very ambitious go given that um you know there are also a lot of other players are competing with you guys can you just share the origin of the aspirations and you
there any like solid plans and strategies that uh frax finance has in place to achieve this goal because it sounds like you guys definitely have something in place already before calling that out in particular so we'll love to know if there's anything that you would love to share about this ambitious goal
Yeah, I think Sam is obviously super ambitious, but that also comes with confidence and what he has really built and the FRAX team has built around that.
And I also believe that, you know, FXS is going to be one of the top tokens in the whole industry. I think that's kind of the aspirations there. Like, you know, it's not just us, you know, saying, saying, you know, that it's going to be the top five, but we're working towards that because we have history and we've done a lot of impressive things and we've hit a lot of milestones that we can really, you know, confidently, you know, lay out there.
And in terms of the plans and the strategies for this, I think FraxTL is going to be, I think one of the driving factors of this. Because I think we always like to, we always have this saying that all roads lead to Frax, right? So everything is going to go back to the governance token, which is FXS. And that's why we think it's going to be big in terms of FraxTL.
And all the protocol revenues after we hit 100 CR is going to go back to FXS. So I think that's going to be the core asset that's going to be growing exponentially with all these new innovative products coming out for FRAC and the FRAC ecosystem.
Wow. That sounds very solid driving forces to me. And we are definitely looking forward to seeing that day come. And maybe we're going to have another conversation talking about, oh, now we're here. So what's your next goal? That would be awesome. Hopefully soon. Yeah. Well, okay. Looking ahead, what are your thoughts on
on the core driving factors for like decentralized stablecoin overall. So that would be my last question to ask because it sounds like you guys are super bullish on stablecoins. And also like nowadays, especially in this market cycle, we're seeing like a lot of like emerging new trends going viral, such as well, like name it like meme coins. And they're like,
There's always something new in this space. But currently, what do you think about decentralized stablecoin demands and also the DeFi in the next cycle, potentially? How do you see these factors shaping the industries in the future? Because some people are saying that, oh, DeFi is probably not going to drive us another DeFi summer that we used to see. What do you think of those speculations?
I mean, I think everyone's entitled to their opinion. I personally think there's going to be another DeFi summer for sure. Just like how we had an LSD summer this year. Yeah. I think DeFi...
is definitely here to stay and along with that stablecoins as well. I know that it's been a pretty rough roller coaster journey in terms of stablecoins this year and the past year, but we now kind of have proven that stablecoins are here to stay. And the reason why we think this is that we believe in this idea of stablecoin maximalism, and it's actually the belief that most crypto protocols kind of converge to become a stablecoin in the long term.
or become of central importance to their existence. So everything slowly will converge to some kind of stablecoin given sufficient time and sufficient size. So we think that almost every DeFi primitive converges on becoming a stablecoin-like and every stablecoin at scale converges on the same structure. And I think we've kind of seen this movement with a lot of projects launching their own stablecoin.
And, you know, whether it's Web 2 or Web 3, we've seen a lot of big names and a lot of different products coming with their own stablecoin, with their different stablecoin stability mechanism, which is really interesting to see and which always goes back to us kind of learning and seeing, oh, what are they doing here? What's cool there? You know, what's not? What can we what are some takeaways from this?
So I think with this idea of stable coin maximalism, we think that it's only going to continuously grow the space and it's not going to go away. And I think there's definitely going to be a DeFi, if not a stable coin summer. So I think that's my personal opinion and I truly believe that. So that's the idea there.
Yeah, like hopefully we'll get to see that. Well, I would say StablePoint is the core use case for, you know, the whole Web3 ecosystem.
industry as well. And also, like you said, like there are a lot of, you know, a lot of other key players jumping in this space, validating your theory, validating your like verticals. So definitely we will see. Thank you so much for all those insights. Thank you so much for, you know, letting us pick your brain before the Fraxel launch and good luck with everything. And yeah, it's going to be a fun ride. We will see. Thank you so much, Andy.
No, thank you for having me. I'm super honored to be here and, you know, on behalf of Frax and talking to you guys about what I can tell you guys about Frax. Super happy to be here. Thank you. Thank you.
