Before the development of Frax, stablecoins were generally divided into three different categories: fiat collateralized, cryptocurrency-overcollateralized, and algorithmic with no collateral. Frax is the first kind of decentralized stablecoin to classify itself as fractional-algorithmic ushering in the 4th and most unique category.
The Frax Protocol is the first fractional-algorithmic stablecoin system. It is an open-source, permissionless, and entirely on-chain protocol that runs on Ethereum (although there is a possible cross-chain implementation in the future). The main aim of the Frax protocol is to provide a highly scalable, decentralized, algorithmic money system in replacement of fixed-supply digital assets like Bitcoin. Frax has a specific unique stablecoin called FRAX and serves as the financial medium on the platform.
Frax is designed 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.
Although there are no predetermined timeframes for how quickly the number of collateralization 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 fractional algorithmic is a unique Frax concept that operates with the stability of the platform’s finance. Originally, Frax is a unique stablecoin with parts of its supply backed by collateral and parts of the supply algorithmic. The ratio of collateralized and algorithmic depends on the market’s pricing of the FRAX stablecoin. If FRAX is trading at above $1, the protocol decreases the collateral ratio. If FRAX is trading at under $1, the protocol increases the collateral ratio. This algorithmic system is decentralized, governance-minimized, community-governed, and also emphasizes a highly autonomous, algorithmic approach with no active management.
The platform operates on fully on-chain oracles. Frax v1 uses Uniswap (ETH, USDT, USDC time-weighted average prices) and Chainlink (USD price) oracles. Unlike most developments with only one utility token, the Frax protocol is a two token system encompassing a stablecoin, Frax (FRAX), and a governance token, Frax Shares (FXS). The Frax Share token (FXS) is the non-stable, utility token in the protocol. It is designed to be volatile and hold rights to governance and all utility of the system.
Who Are the Founders of Frax (FRAX)?
The Frax Protocol is the brainchild of American software developer Sam Kazemian who came up with the first idea of a fractional-algorithmic stablecoin in 2019. Sam is an Iranian-American software programmer. Previously, he co-founded Everipedia, a for-profit, wiki-based online encyclopedia. He originally devised the idea when he noticed that stablecoins were growing rapidly but none had any mixture of algorithmic monetary policy and collateralization.
The founding team of Frax engineers consists of Travis Moore and Jason Huan. Travis Moore is the Chief Technology Officer at Frax Finance and Everpedia. He is an Italian-American computer programmer, angel investor, and entrepreneur from Thousand Oaks, a suburb of Los Angeles, California.
Jason Huan is a co-founder at Frax. He was a course instructor at UCLA where he Lectured and served as a TA for CS 188, the first blockchain course within UCLA’s School of Engineering. He is also the co-founder at blockchain UCLA, a formal student-run blockchain community at UCLA, centered around the technological and business aspects of blockchain applications.
What is Frax (FRAX) used for?
Any LP can lock their LP tokens up to 1095 days (3 years). LP stakes are multiplied by two boost factors: time-locked & collateral ratio. The collateral ratio boost applies to the base emission rate of FXS, so an increase in the collateral ratio boost means more FXS distributed across the whole system.
Frax operates on a highly governance-minimized approach that is developed to design trustless money in the same ethos as Bitcoin. They operate on a wide spectrum of parameters. Some of the parameters that are up for governance through FXS include adding/adjusting collateral pools, adjusting various fees (like minting or redeeming), and refreshing the rate of the collateral ratio.
Frax community members get rewarded with FXS. FXS rewards will be claimable for users who deposit UniSwap LP tokens to incentivized pairs, which can be attained by adding liquidity to token pairs on UniSwap
Frax allows their token holders to stake. The time-locked boost applies to an individual’s stake as a proportion of all of the stakes in the pool. In other words, a time-locked boost will increase the amount of FXS a single user gets by increasing their proportion of the pool which decreases the proportion
Community members get to pay for services on the Frax ecosystem using the utility tokens.
What Makes Frax (FRAX) Unique?
Unlike most protocols with one digital asset, Frax has two: FRAX and FXS. FRAX is the stablecoin targeting a tight band around $1/coin while Frax Shares (FXS) is the governance token that accrues fees, seigniorage revenue, and excess collateral value. Unlike most projects that had the purely algorithmic monetary policy and failed or shut down without any significant traction, Frax was designed as an answer to measure the market’s confidence in a partly algorithmic and partly collateralized stablecoin.
How Many Frax (FRAX) Coins Are There in Circulation?
It currently has a circulating supply of 2,653,242,158 FRAX coins.
How Is Frax (FRAX) Secured?
The Frax ecosystem is protected and this range of protection is verified and audited by Certik. Certik is a registered organization in blockchain security and uses best-in-class technologies to secure blockchain and smart contracts. Also, there has been no reported case of security breach or theft, as the Frax ecosystem is designed with the utmost security protocol.
How do I buy Frax (FRAX)?
The Frax platform provides a highly decentralized money system in replacement of the regular ones. It has specific, unique, highly scalable, trustless, and extremely stable.
FRAX tokens can be easily purchased by the following steps.
* Register a trading account with a supported crypto exchange.
* Deposit a 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 (FRAX)?
The PTPWallet platform supports many cryptocurrencies simultaneously such as Frax (FRAX). Because of its vast use case, it has grown to become one of the most used platforms as it serves as an exchange and an engine to discover other cryptocurrencies. Additionally, users can easily use PTPWallet as their FRAX wallet because it offers a simple FRAX interactive interface making it easy for people to navigate its system.