Frax Ether made a bold move on June 11, burning a massive amount of frxETH to keep its peg to ETH, despite losing ~$23.4M in the process.   Frax Ether mints $frxETH and pairs it with ETH in a Curve pool to provide liquidity.

FrxETH and ETH are always supposed to be equal, but sometimes due to market volatility, $frxETH falls behind.

That happened on June 11, and Frax Finance reacted swiftly by withdrawing its frxETH and ETH from the pool, burning the frxETH, and using the ETH to buy more frxETH from the market.

This is how Frax Ether maintains its peg, which worked like a charm.

The frxETH/ETH Curve price is still a bit below $1 at $0.9981, but that’s nothing to worry about.      

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