Maker vs. Frax Data Showdown: Which DeFi Giant Comes Out on Top?
Both are excellent protocols, with Maker still being the king of cash, while Frax continues to add innovative products to its components.Author: Wajahat Mughal
Compiled by: Deep Tide TechFlow
DeFi researcher Wajahat Mughal compares two leaders in DeFi and RWA: Maker and Frax Finance from multiple dimensions, including their main businesses, yields, sources of income, protocol revenue, governance tokens, and future developments. Which one will be better?
Maker and Frax are two major leaders in the DeFi space.
Maker provides the over-collateralized decentralized stablecoin DAI, supported by ETH, stablecoins, and RWAs (most of which are U.S. Treasury bonds); Frax offers the decentralized stablecoin FRAX and a series of financial products built around it.
The collateral for DAI includes ETH, stablecoins, and RWAs—most of which are U.S. Treasury bonds.
The collateral for FRAX is about to change. It is currently moving towards 100% CR, no longer supported by FXS. The recently added sFRAX and the upcoming FXB (bonds) will provide RWA support.
Yields
The current supply of sDAI is 1.73 billion, with a yield of 5%; the current supply of sFRAX is 41 million, with a yield exceeding 6.5%.
It can be seen that DAI has a huge dominance in supply, but currently, Frax's yield is leading.
Sources of Income
The yield of sDAI comes from various RWA T Bill yields, as can be seen from the custodial institutions.
sFRAX earns IORB rates from overnight interest accounts, which are held by FinresPBC, and then the earnings are passed on to sFRAX by FinresPBC.
Maker is currently one of the most profitable protocols in DeFi, with over $80 million in revenue. This is because their supply has been consistently growing.
FRAX has multiple sources of income, including TBills, AMOs, and of course, ETH LSDs—currently generating an annual income of $20 million.
MKR and FXS
MKR has a market cap of $1.3 billion, used for continuous buybacks of protocol revenue.
FXS has a market cap of $450 million, earning income from the protocol (currently all efforts are aimed at raising CR to 100%).
Future
Both are excellent protocols; Maker remains the king of cash, while Frax continues to add innovative products to its components.
Next steps include Maker's Endgame, which involves token restructuring, the elimination of decentralized stablecoins, launching subDAOs, AI integration, and ultimately the Maker Chain; Frax includes Frax bonds, updates to frxETH staking products, and a new L2 Frax Chain on Ethereum.
Personally, I prefer Frax; I like the ecosystem they are building.
