Frax Share
The Frax Protocol is the first fractional-algorithmic stablecoin system.
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Frax Share
The Frax Protocol is the first fractional-algorithmic stablecoin system.
The Frax Protocol is the first fractional-algorithmic stablecoin system.
Frax is open source, permissionless and completely online - currently implemented on Ethereum (with possible cross-chain implementations in the future). The ultimate goal of the Frax protocol is to provide scalable, decentralized, algorithmic money instead of fixed-supply digital assets like BTC. The protocol includes the following concepts:
Fractional-algorithmic – Frax is a unique stablecoin, part of the supply of which is secured by collateral, and part of which is backed by the supply algorithm. The ratio of collateralized to algorithmic depends on the market price of the FRAX stablecoin. If FRAX is trading above $1, the protocol reduces the collateral ratio. If FRAX is trading below $1, the protocol increases the collateral ratio.
Decentralized and Minimal Governance – Community governance and emphasis on a highly autonomous, algorithmic approach with no active governance.
Fully on-chain oracles - Frax v1 uses Uniswap (ETH, USDT, USDC time-weighted average prices) and Chainlink (USD price) oracles.
Two tokens - FRAX is a stablecoin targeting a narrow range around +- $1 per coin. Frax Shares (FXS) is a governance token that generates fees, seigniorage income, and excess collateral value.
Prior to Frax, stablecoins fell into three different categories:
- backed by fiat,
- backed by cryptocurrencies,
- algorithmic without collateral.
Frax is the first type of decentralized stablecoin that classifies itself as a fractional algorithmic coin, opening up the 4th and most unique category.
Frax is open source, permissionless and completely online - currently implemented on Ethereum (with possible cross-chain implementations in the future). The ultimate goal of the Frax protocol is to provide scalable, decentralized, algorithmic money instead of fixed-supply digital assets like BTC. The protocol includes the following concepts:
Fractional-algorithmic – Frax is a unique stablecoin, part of the supply of which is secured by collateral, and part of which is backed by the supply algorithm. The ratio of collateralized to algorithmic depends on the market price of the FRAX stablecoin. If FRAX is trading above $1, the protocol reduces the collateral ratio. If FRAX is trading below $1, the protocol increases the collateral ratio.
Decentralized and Minimal Governance – Community governance and emphasis on a highly autonomous, algorithmic approach with no active governance.
Fully on-chain oracles - Frax v1 uses Uniswap (ETH, USDT, USDC time-weighted average prices) and Chainlink (USD price) oracles.
Two tokens - FRAX is a stablecoin targeting a narrow range around +- $1 per coin. Frax Shares (FXS) is a governance token that generates fees, seigniorage income, and excess collateral value.
Prior to Frax, stablecoins fell into three different categories:
- backed by fiat,
- backed by cryptocurrencies,
- algorithmic without collateral.
Frax is the first type of decentralized stablecoin that classifies itself as a fractional algorithmic coin, opening up the 4th and most unique category.
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