Sturdy x Frax: level up your Curve Frax yields for up to 29% APY

Sturdy is a protocol for interest-free borrowing and high yield lending. Rather than charge borrowers interest¹, Sturdy stakes their collateral and passes the yield to lenders. Sturdy launched on Ethereum mainnet in early June, with one use case being using Curve LP tokens as collateral with Convex staking on the backend.

To date, borrowers who supplied Curve LP token as collateral on Sturdy only earned the Base Curve APR; all other rewards from Convex staking went to lenders. The relatively low Base Curve APR made it unattractive to supply Curve LP tokens as collateral on Sturdy.

This is changing with our latest integration, which will enable Curve FRAX BasePool LP tokens (FBP) to be used as collateral on Sturdy. Now, users who deposit FBP will receive both the full Base Curve APR and 75% of all CRV rewards from Convex staking, amounting to 2.72% APY at the time of writing. Combined with an LTV of 90% and interest-free loans, borrowers will be able to lever up 11x and earn over 29% APY! Users can also deposit Curve FRAX-3CRV LP tokens, which currently yields 1.51% APY.

Leverage always contains risk, however in this case both the collateral and borrowed assets are stablecoins. As a result, liquidations will only occur in the event of a depeg. Frax’s deep liquidity and innovative peg mechanisms (like the AMO) have enabled Frax to consistently trade tightly around its $1 peg through a variety of market conditions.

Sturdy is looking forward to supporting future FRAX BasePool pairs!

[1] Interest rates will go into effect if the utilization rate of a reserve goes above 90%. You can find more information about this in our docs.

About Frax

Frax is the first and only stablecoin with parts of its supply backed by collateral and parts of the supply algorithmic. The stablecoin (FRAX) is named after the “fractional-algorithmic” stability mechanism. $FRAX is the stablecoin targeting a tight band around $1/coin.

About Sturdy

Sturdy is a first of its kind DeFi protocol for interest-free borrowing and high-yield lending. Rather than charge borrowers interest, Sturdy stakes their collateral and passes the yield to lenders. This model changes the relationship between borrowers and lenders to make Sturdy the first positive-sum lending protocol. Sturdy is live on Ethereum Mainnet and Fantom Opera.

To learn more, you can connect with us on Twitter, Discord, and Medium.