Frax Finance team proposes rejecting PoW-based Ethereum forks

The Frax Finance core development team has urged the community to refrain from launching the algorithmic stablecoin FRAX in potential Ethereum forks based on the Proof-of-Work (PoW).

First major stance against ETHPOW from ⁦@fraxfinance⁩ core dev team.

[FIP — 101] Make FRAX stablecoins only redeemable on PoS ETH — Governance Proposals / FIPs — Frax Finance Governance https://t.co/TgjGR5yDxz

— Zaheer (@SplitCapital) August 4, 2022

The proposal author, FIP-101, was Frax’s co-founder Sam Kazemian. The initiative envisions FRAX being redeemable exclusively on the Ethereum 2.0 network based on the Proof-of-Stake (PoS) algorithm.

“FRAX is the fifth-largest stablecoin on the market, accounting for more than 20% of the Curve platform’s TVL, a top-10 Uniswap token, and a critically important part of the Ethereum ecosystem. Therefore, it makes sense to clearly and publicly signal holders’ desire for FRAX through the governance mechanism,” wrote Kazemian.

If approved, the FRAX DAO would convert all assets of the potential PoW network (provided they have substantial value) into the PoW version of ETH. The funds would be deposited into the project’s treasury to satisfy the stablecoin redemptions.

The Ethereum mainnet merge with the Beacon Chain is planned for September 2022, though the update timeline may change depending on the cumulative difficulty metric.

As reported, the cryptocurrency exchange Poloniex announced support for potential PoW-based Ethereum forks.

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