According to Cointelegraph: Frax Finance, a decentralized finance (DeFi) lending protocol, has been granted community approval for a new liquidity pool endowed with a $250 million allocation of Ethena Labs' USDe. This undertaking aims to significantly enhance Frax's footprint in the DeFi space.
The new liquidity pool, part of Frax’s Singularity Roadmap, is set to become one of the most abundant in the DeFi landscape. It will also diversify Frax's yield backing, according to Ethena Labs. The pool will permit the minting of new FRAX tokens, backed by overcollateralized debt—one of the milestones of this recently approved proposal.
As per Curve Finance data, the liquidity pool presently holds a sum of $44.9 million, with $30.6 million in FRAX coins and $14.6 million in the synthetic USDe dollar.
Following the launch of the USDe on the mainnet just two months ago, Ethena Labs breached the $2 billion total value locked (TVL) milestone on April 6. The protocol is currently offering a sizable 37.1% annual percentage yield (APY) to over 125,000 investors.
In addition, USDe emerged as the largest dollar-backed asset after Tether's (USDT) and Circle’s (USDC). This development puts Ethena Labs on track to becoming the highest revenue-generating project in crypto, according to José Maria Macedo, CEO of Delphi Labs and founding partner of Delphi Ventures.