FrxUSDCustodian

Overview

FrxUSDCustodian is a non-custodial mint/redeem contract designed to maintain a 1:1 backing between frxUSD and a corresponding real-world asset (RWA) token or stablecoin, such as USDC, USDB, or USTB. It operates as an ERC-4626 (opens in a new tab)-style vault but with added Frax-specific functionality and governance features.

Each instance of this contract holds reserves of a specific custodian token and allows users to deposit it to mint frxUSD or redeem frxUSD to withdraw the custodian token, subject to mint/redeem caps and fees.

It is designed to support regulatory compliance (e.g. with Genius Act (opens in a new tab)) and can shuffle excess tokens into yield-bearing RWA issuers.

Key Features

• ERC-4626-like vault with mint/redeem symmetry
• Fee controls for minting and redeeming
• Cap on the total frxUSD minted via this vault
• Conversion logic that handles differing decimals between frxUSD and the custodian token
• Restricted operator list for shuffling assets into yield strategies (e.g., RWA issuers)
• Optional slippage protection during RWA shuffle
• Admin-controlled upgrades, fees, and limits via Ownable2Step

Initialization

constructor(address _frxUSD, address _custodianTkn)

• Sets the immutable references to frxUSD and custodian token
• Retrieves and stores their decimals

function initialize(address _owner, uint256 _mintCap, uint256 _mintFee, uint256 _redeemFee)

• One-time initialization function (guarded by wasInitialized flag)
• Sets owner, cap, and fees

State Variables

Core Functions

Minting and Depositing

function deposit(uint256 assets, address receiver) external returns (uint256 shares);
function mint(uint256 shares, address receiver) external returns (uint256 assets);

• Mints frxUSD in exchange for the backing asset
• Subject to mintCap and mintFee

Redeeming and Withdrawing

function withdraw(uint256 assets, address receiver, address owner) external returns (uint256 shares);
function redeem(uint256 shares, address receiver, address owner) external returns (uint256 assets);

• Redeems frxUSD for the underlying token, minus redeemFee

Conversions and Previews

function previewDeposit(uint256 assets) public view returns (uint256 shares);
function previewRedeem(uint256 shares) public view returns (uint256 assets);

• Computes expected mint/redeem amounts with fees and decimal adjustments

Limits

function maxMint(address) public view returns (uint256);
function maxWithdraw(address) public view returns (uint256);

• Enforces mint cap and ensures vault solvency

RWA Shuffle

function shuffleToRwa(uint256 amount, uint256 minAmountRwaOut) public;

• Allows approved bots to move idle custodian tokens to RWA issuers for yield
• Enforces slippage bounds and post-shuffle minimum balance

Events

Access Control

• Inherits Ownable2Step for safe admin transfer

• Only the owner can:

  • Adjust fees, cap, operator list
  • Call setMinAfterShuffle
  • Recover tokens or perform upgrades

Usage in Frax

Each FrxUSDCustodian contract is paired 1:1 with a specific backing asset. Examples:

• frxUSD-USDC Custodian holds USDC
• frxUSD-USDB Custodian holds USDB

Together, they allow frxUSD to be dynamically minted and redeemed against multiple real-world backed assets, while ensuring compliance, solvency, and flexibility for revenue-generating strategies.

Author: Frax Finance License: MIT