Fraxlend

Fraxlend receives a B- risk grade (34/100) from Hindenrank, where lower scores indicate lower risk. Moderate risk — well-designed isolated lending with strong documentation, tempered by oracle dependencies and governance concentration in the veFXS model. Fraxlend is an isolated lending protocol built by Frax Finance that enables permissionless creation of lending markets between any two ERC-20 tokens. With $31M in TVL across Ethereum, Fraxtal, and Arbitrum, it uses a novel dynamic interest rate model that adapts to utilization. The B- risk grade reflects solid documentation and audit history but notes exposure to oracle dependencies and governance concentration risks inherent in the veFXS model.

The key risks identified for Fraxlend are: (1) Each lending pair operates independently — if a pair's collateral token drops sharply, lenders in that specific pair could lose money even if other pairs are fine. (2) Interest rates adjust automatically and can spike rapidly during market turbulence, making borrowing costs suddenly much higher than expected. (3) The protocol is deeply connected to the broader Frax Finance ecosystem, so problems with the FRAX stablecoin or governance token could affect Fraxlend.

Fraxlend scores 34/100 across eight risk dimensions: Mechanism Novelty: 3/15, Interaction Severity: 6/20, Oracle Surface: 5/10, Documentation Gaps: 2/10, Track Record: 6/15, Scale Exposure: 3/10, Regulatory Risk: 3/10, Vitality Risk: 6/10. The highest risk area is Vitality Risk at 6/10.

Among 90 rated Lending protocols on Hindenrank, Fraxlend ranks #40 by safety (lowest risk score = safest). Its 34/100 risk score and B- grade place it in the middle tier of Lending protocols.

Fraxlend scores 6/15 on the Track Record risk dimension, indicating some history of security incidents or exploits. Higher scores reflect more severe or frequent incidents. Review the full risk report for details.