[FIP-448] Wind Down the Frax Price Index (FPI) System
AI summary
This proposal aims to shut down the Frax Price Index (FPI) system, which was designed to be an inflation-indexed stablecoin. The Frax Core Team believes FPI is no longer useful due to changing market conditions, the emergence of better-performing alternatives like frxUSD and sfrxUSD, and declining user adoption. If passed, FPI's price will be frozen, new FPI cannot be created, and its underlying assets and liabilities will be merged into the Legacy FRAX system. The goal is to simplify the Frax protocol and reallocate resources to more successful products.
If this proposal passes, FPI holders will no longer have an inflation-tracking asset, and its value will be fixed. The Frax protocol will become simpler, potentially improving efficiency and allowing the team to focus on products with higher demand. The Legacy FRAX system will absorb FPI's balance sheet, gaining approximately $2.74 million in excess collateral, which benefits Legacy FRAX holders.
Voting results
Votes over time
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🐳 Whale votes
3 votes > 5% VPFull proposal
Authors
Frax Core Team
Summary
This proposal seeks to wind down the Frax Price Index (FPI) system and retire FPI as an active product within the Frax ecosystem. While FPI was an innovative attempt to create an inflation-indexed unit of account, changing market conditions, the emergence of higher-yield alternatives, and declining adoption have significantly reduced its utility. This proposal would allow Frax Finance to simplify the protocol and focus resources on products with stronger demand and strategic importance.
Background & Motivation
The Frax Price Index (FPI)…