Problem

True Freeze users can pay a fee to unlock their ETH early.

What is the sum of the fees paid for early unlocks?
So far, what percentage of locked ETH was unlocked early?

Definition

I. What is True Freeze?

True Freeze is proof of patience primitive, 100% autonomous with 0 governance, 0 emergency powers, and designed to function for 100s of years on-chain. In True Freeze, you will lock WETH into a Certificate of Deposit NFT and you will be paid for that. The Freezer NFT pegged 1:1 with ETH and you mint frETH yield tokens as payment for your proof of patience, 1 frETH per 1 ETH-Year of Patience.

Patience => redeem NFT at maturity for ETH and keep the frETH paid upfront
Impatience => early withdrawal fees paid to stakers of FRZ revenue token

II. Key Vocabulary

Freezer NFT: An NFT that represents a deposit of a blockchain native asset
Maturity Date: The date a Freezer NFT can be redeemed for no cost, time to maturity affects early penalty costs
Lock Date: The date the Freezer NFT was created, the time since lock date (i.e., to maturity) affect early penalty costs
Freezer ETH (frETH): The yield token is minted as a reward for creating a Freezer NFT, needed in case of early withdrawal
Early Withdrawal: Redeeming a Freezer NFT for the deposit prior to Maturity, causes penalties that are paid to FRZ stakers
FRZ: The inflationary revenue token for the True Freeze ecosystem, stake it to earn early withdrawal penalties

Reference: [1] & [2]

III. Early Withdrawal Costs

Early Redemption of Freezer NFTs has a variable frETH fee and a 0.25% WETH penalty.1 frETH is minted per 1 ETH-YEAR locked, where for simplicity 1 Year always equals 365 Days, frETHm = amount∗days/365

frETH fee of early withdrawal of Freezer NFT:

> * Immediate Withdrawal: costs 1.20x of the minted frETH from that NFT's creation > * First 67% of the Lock Duration: falls to 1x of the minted frETH > * Final 33% of the Lock Duration: falls to 0 frETH on/after the maturity date

WETH penalty of early withdrawal of Freezer NFT:

> * Prior to the Maturity Date: a 0.25% WETH penalty > * On/after maturity: 0% penalty

When an NFT is redeemed prior to 67% of its lock time, more frETH is required than was originally minted for the NFT:

> * Total withdrawal fee = 1x + 0.Ax [extra amount] > * 50%*0.Ax => given to FRZ stakers > * 1x + 50%*0.Ax => will burned

NFTs redeemed in the final 33% of their lock time have all the frETH fee burned (the 0.25% WETH penalty always goes to FRZ stakers).

Reference: [3]

Method

For retrieving the True Freeze locks, we used the True Freeze Governor contract 0xc02aaa39b223fe8d0a0e5c4f27ead9083c756cc2 where the signature was for withdrawing 0x0f221cab from ethereum.core.fact_event_logs table
For retrieving the True Freeze unlocks, we used the True Freeze Governor contract 0xc02aaa39b223fe8d0a0e5c4f27ead9083c756cc2 where the signature was for withdrawing 0xbe5021ec from ethereum.core.fact_event_logs table
For unlocking transactions, we used WETH and frETH token contracts and True Freeze Governor and Multi Rewards contract to track the penalty ETH fee and frETH fees (burned & FRZ stakers rewards) for early withdraws
Calculating the lock duration using 365∗Minted_frETH/Deposited_ETH = Lock Duration Days
Calculating the early (unlock before lock days end) and mature (unlocks after lock days end) unlocks count and details
Calculating the Patience Percentage = 100*Days To Unlock/Lock Duration Days, if this metric is less than 100 it means that it’s an early unlock
Calculating the $frETH Repay Percentage = 100*($frETH Paid Fees)/Minted_frETH, if this metric is less than 100 it means that it’s an early unlock
Plotting the results in several aspects for showing different considerable insights

Early Unlocks

An early unlock is an unlock that happened before its lock date, and here we can see the number of early unlocks, the number of unique users who unlock their $ETH early, and the average patience percentage.

Early unlocks have two types of cost, $ETH and $frETH. First, we calculated the total amount of $ETH as a fee and as a penalty separately. Then, we calculated the total amount of repaid $frETH that burned and the total amount of repaid $frETH that went for FRZ stakers reward.

Based on minted $frETH on lock time, we showed the average $frETH repay percentage.

Mature Unlocks

A mature unlock is an unlock that happened after its lock date, and here we can see the number of mature unlocks and the number of unique users who unlock their $ETH maturely.

We also calculated the average patience percentage and the total $ETH paid as a fee for mature unlocking.

Early Unlocks Weekly Costs

Here we showed the weekly costs of the early unlocks in the $ETH and $frETH categories besides the number of early unlock over time.

For $ETH cost we have:
- Unlock transactions $ETH fees
- Unlocks $ETH penalty (0.25 % of locked $ETH)
For $frETH cost we have:
- Amount of $frETH that will be burned
- Amount of $frETH that will be going to FRZ stakers

These costs are separated on the bar charts, as you can see.

Unlocks, Early vs Mature

We have two types of unlocks, as you saw. here we compared early and mature unlocks in two different aspects:

Number of Unlocks
Total Amount of Unlocked $ETH

Until now, 50% of the two unlocks were early, and on the volume side, only 9% of the unlocked volume was unlocked early.

Unlocks Repaid Percentage Over Time

When a user lock’s a certain amount of $ETH, according to lock duration, a certain amount of $frETH will be minted and goes to the user’s address. with respect to unlocking time, users may have to repay a portion of it (or sometimes 1.2x of it) to unlock their $ETH.

So, here we showed repaid percentage of all unlocks over time in a chart:

Conclusion

In this analysis, we dug into the cost of early redemptions on True Freeze. Since True Freeze is a new platform, there were only a few early and mature unlocks in the first two months after launch. In the end, we provided a detailed list of all early and matured withdraws for everyone who want to see each of the unlocked one by one:

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