Frax Finance, a DeFi lending protocol, has successfully passed a community governance proposal, allocating $250 million of Ethena Labs’ USDe (CRYPTO:USDE) into a new liquidity pool.

This move, a key step in Frax’s Singularity Roadmap, introduces an automated market operation (AMO) to support the minting of new FRAX tokens backed by overcollateralised debt.

Anticipated to be one of the largest in DeFi, this liquidity pool aims to diversify Frax's backing yield, demonstrating a forward-looking strategy.

The approval of the proposal on April 5 signifies a confident stride towards enhancing and expanding decentralised financial services.

Ethena Labs highlighted the significance of this development in an April 8 post, emphasising its role in driving DeFi's ongoing evolution.