FRAX launches sFRAX, a collateral vault designed to take advantage of rising U.S. Treasury yields

According to TechFlow, Blockworks reported that FRAX launched sFRAX, which aims to take advantage of the rising yields on U.S. Treasury bonds in collateral vaults.

FRAX founder Sam Kazemian said that most stablecoins on the market are suitable for low interest rate environments, but FRAX needs to track interest rates to remain relevant. Kazemian said that FRAX is constantly improving the stablecoins with Treasury exposure to ensure that they are pegged to the US dollar.

It is reported that sFRAX is a new product of FRAX, and users will be able to obtain a 10% deposit interest rate, which will then gradually drop to the current 5.4% of the Federal Reserve. sFRAX is the result of cooperation with FinresPBC and cooperates with Lead Bank to purchase Treasury bills.

Frax’s sFRAX is similar to MakerDAO’s Dai Savings Rate (DSR), but Kazemian believes that Frax’s design is more sustainable and different from Maker’s interest rate model.