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Frax Ether (frxETH)
Frax Staked Ether (sfrxETH)
As previously mentioned, Frax Staked Ether is not a supported collateral type to mint OETH. Instead, frxETH is accepted into the Origin Ether vault and used to mint Staked Frax Ether. Users may desposit sfrxETH through The Zapper, which will convert sfrxETH to frxETH and deposit it into the Origin Ether vault. frxETH is a 100% collateralized, ether-pegged LST used within the Frax ecosystem, but it does not inherently earn yield.
sfrxETH is an ERC-4626 vault and earns validator rewards from the ether collateral used to mint frxETH. Unlike stETH or rETH, sfrxETH rewards are accrued in a rewards pool and denominated in frxETH. When a user unstakes their sfrxETH, they receive their original frxETH collateral back in addition to frxETH rewards earned through staking.
The price of sfrxETH increases relative to frxETH and ETH over time. This is because sfrxETH holders can claim frxETH plus accrued staking rewards. Frax takes a 10% fee from yield generated, 2% of which goes into a slashing insurance fund.