Frax is the first fractional stablecoin protocol. Frax is open-source, permissionless, and entirely on-chain – currently implemented on Ethereum and 12 other chains. It aims to provide a highly scalable, decentralized, algorithmic currency in place of fixed-supply digital assets like BTC.
Frax is the first and only stablecoin with parts of its supply backed by collateral and parts of the supply algorithmically stabilized, and its end vision is to build the most important decentralized stablecoin in the world. The Frax Finance economy is composed primarily of the two stablecoins: a native AMM (Fraxswap), and a lending facility (Fraxlend).
Fraxswap
Fraxswap is the first AMM with time-weighted average market maker orders used by the Frax Protocol for rebalancing collateral, mints/redemptions, expanding/contracting FRAX supply, and deploying protocol-owned liquidity onchain.
Fraxlend
Fraxlend is the lending facility for the FRAX and FPI stablecoins, allowing debt origination, customized non-custodial loans, and onboarding of collateral assets to the Frax Finance economy.
The Frax ecosystem has 2 stablecoins: FRAX (pegged to the US dollar) and FPI (pegged to the US Consumer Price Index). FRAX is the stablecoin targeting a tight band around $1/coin. Frax Share (FXS) is the governance token of the entire Frax ecosystem of smart contracts, which accrues fees, seigniorage revenue, and excess collateral value.
The Frax Price Index (FPI) stablecoin is the first stablecoin pegged to a basket of consumer goods, creating its own unit of account separate from any nation-state-denominated money. FPI is the inflation-resistant, CPI-pegged stablecoin. It is the governance token of the Frax Price Index and splits its value capture with FXS holders.
It is important to note that Frax is an agnostic protocol. It makes no assumptions about what collateral ratio the market will settle on in the long-term. It could be the case that users simply do not have confidence in a stablecoin with 0% collateral that’s entirely algorithmic. The protocol does not make any assumptions about what that ratio is and instead implements the ratio at whatever the market demands for pricing FRAX at $1.
FXS is the value accrual and governance token of the entire Frax ecosystem. All utilities are concentrated in FXS.
The Frax Share token (FXS) is the non-stable, utility token in the protocol. It is meant to be volatile and hold rights to governance and all utilities of the system. It is important to note that we take a highly governance-minimized approach to designing trustless money in the same ethos as Bitcoin.
Who are the founders of Frax Share (FXS)?
The founder of Frax is Sam Hamidi-Kazemian, an Iranian-American software programmer. He co-founded Everipedia, a for-profit, wiki-based online encyclopedia, with Theodor Forselius in December 2014.
What is Frax Share (FXS) used for?
Vote and make decisions
The community can propose new gauging rewards for strategies that integrate FRAX stablecoins. FXS emissions are fixed, halved each year, and entirely flow to different gauges based on the votes of veFXS stakeholders.
Minting
FRAX stablecoins can be minted by placing the appropriate number of their constituent parts into the system. At Genesis, FRAX is 100% collateralized, meaning that minting FRAX only requires placing collateral into the minting contract. During the fractional phase, minting FRAX requires placing the appropriate ratio of collateral and burning the appropriate ratio of Frax Shares (FXS).
How is Frax Share (FXS) unique?
Frax attempts to be the first stablecoin protocol to implement design principles of both to create a highly scalable, trustless, extremely stable, and ideologically pure on-chain money. The protocol also has a pool contract that holds USDC collateral where pools can be added or removed with governance.
Although there’s no predetermined timeframe for how quickly the number of collateral changes, we believe that as FRAX adoption increases, users will be more comfortable with a higher percentage of FRAX supply being stabilized algorithmically rather than with collateral.
The collateral ratio refresh function in the protocol can be called by any user once per hour. The function can change the collateral ratio if the price of FRAX is above or below $1. When FRAX is above $1, the function lowers the collateral ratio by one step, and when the price of FRAX is below $1, the function increases the collateral ratio by one step.
Both refresh rate and step parameters can be adjusted through governance. In a future update of the protocol, they can even be adjusted dynamically using a PID controller design. The price of FRAX, FXS, and collateral are all calculated with a time-weighted average of the Uniswap pair price and the ETH: USD Chainlink oracle.
The Chainlink oracle allows the protocol to get the true price of USD instead of an average of stablecoin pools on Uniswap. This allows FRAX to stay stable against the dollar itself, which would provide greater resiliency than using a weighted average of existing stablecoins only.
How many Frax Share (FXS) coins are in circulation?
It has a circulating supply of 1,498,771,031 FRAX coins.
How is Frax Share Network secured?
The Frax network is audited by Certik, a popular decentralized auditing platform. Their audit reports are presented clearly for the general public to see, and they also have an impressive security score, which is as high as 80%.
How do I buy Frax Share (FXS)?
The FRAX token can be used for a wide range of uses, like staking and boosting.
The following steps can easily purchase FRAX tokens.
* Open an account with the crypto trading platform.
* Transfer the specific amount of your fiat currency to your account.
* Wait for your deposit to be confirmed and buy FRAX through your trading account.
Which Cryptocurrency Wallet Supports Frax Share (FXS)?
The PTPWallet platform supports many cryptocurrencies simultaneously, such as Frax Share (FXS). Because of its extensive use case, it has become one of the most used platforms, as it serves as an exchange and an engine to discover other cryptocurrencies. Users can easily use PTPWallet as their FXS wallet because it offers a simple interactive interface, making it easy for people to navigate its system.
