What is Frax?
Frax is the first fractional-algorithmic stablecoin protocol with open-source, permissionless, and entirely on-chain features to become one of the most prominent protocols on the market. Frax's mission is to provide a highly scalable, decentralized, algorithmic money in the fixed-supply digital assets such as BTC.
The Frax ecosystem includes 2 token with each serving its particular purposes.
- Stablecoin: Frax (FRAX).
- Governance token: Frax Shares (FXS).
How does Frax work?
Frax attempts to be one of the first stablecoin protocols to combine the design principles of the two models below to create the Frax mechanism with a highly scalable, trustless, extremely stable, and ideologically pure on-chain money.
- One spectrum of design (entirely collateralized).
- The other extreme (entirely algorithmic with no backing).
Besides, Frax provides a pack of products to serve user's needs:
1. Price Stability: Functions in the Frax mechanism can be refreshed once per hour by the collateral ratio in a step of 0.25% with the FRAX price fluctuation.
- If FRAX is above $1: the function lowers the collateral ratio by one step.
- If FRAX is below $1: the function increases the collateral ratio by one step.
Both procedure help protocol to refresh the collateral ratio and step parameters, adapting the user's needs as well as the protocol's mechanism. In the near future, Frax is expected to be automatically adjusted by using a PID controller design.
2. Minting and Redeeming
This mechanism is shown as below.
3. Token Frax Shares (FXS): FXS is the governance token of the protocol. In May 2022, the protocol will release an updated version of FXS token to generate veFXS, earn special boosts, special governance rights, and AMO profits.
4. Buybacks & Recollateralization
5. Liquidity Programs & Staking: This product is an important feature of every project which can attract user with reward.
Detailed information about FXS Token
FXS token key metrics
- Token Name: Frax
- Ticker: FXS
- Blockchain: Ethereum
- Token Standard: ERC-20, Bep-20, PRC-20, SPL
- ERC-20: 0x3432b6a60d23ca0dfca7761b7ab56459d9c964d0
- BEP-20: 0xe48a3d7d0bc88d552f730b62c006bc925eadb9ee
- PRC-20: 0x1a3acf6d19267e2d3e7f898f42803e90c9219062
- SPL: 6LX8BhMQ4Sy2otmAWj7Y5sKd9YTVVUgfMsBzT6B9W7ct
- Token type: Utility, Governance.
- Total Supply: 99,854,345 FXS
- Circulating Supply: 35,648,060 FXS
FXS Token Allocation
- Liquidity Mining: 60%
- Token Sale: 12%
- Treasury: 5%
- Advisors: 3%
FXS Token Release Schedule
- Liquidity Programs / Farming / Community – Via gauges & governance halving naturally every 12 months.
- Project Treasury / Grants / Partnerships / Security-Bug-Bounties – via Team and Community discretion.
- Team / Founders / Early Project Members – 12 months, 6 month cliff.
- Strategic Advisors / Outside Early Contributors – 36 months.
- Accredited Private Investors – 2% unlocked at launch, 5% vested over the first 6 months, 5% vested over 1 year with a 6 month cliff.
FXS Token Use Cases
The FXS token will have these main roles:
- Governance: User owns the SRM token can vote to the project's proposals.
- Staking Reward: Node supports the cross-chain transactions.
- Fee: SRM Token can be used as fee on the protocol. All fees go to the benefit of SRM.
How to get FXS Token
Users can get FXS token by:
- Buy on CEX, DEX.
- Reward users for staking/farming/yield farming,...
How to buy FXS Token
You can buy FXS Token on DEXs such as SushiSwap, Uniswap,... Alternatively, you can use Coin98 Exchange to swap other tokens for FXS.
Learn more: How to use Coin98 Exchange
How to store FXS Token
You can store FXS token on Coin98 Wallet with these steps:
Step 1: Open Coin98 Wallet & click Receive on the home screen.
Step 2: Search FXS Token.
Step 3: Click on the correct result, copy the wallet address and send FXS to this address.
Team, Investors, and Partners
Founder of the project is Sam Kazemian. Click here for more.
Frax has partnered with Olympus DAO and Ondo Finance.
Roadmap and Update
Is Frax a good investment?
Uniswap and AMMs model
Frax builds a revolutionary hybrid stablecoin concept that has never been seen before, combining principles from Uniswap and AMMs. Due to the constant product function, the asset A and B ratio in a Uniswap pool must be proportionate.
Unique stablecoin model
Frax takes the concept and turns it into a unique stablecoin model - FRAX. This token also works as the LP token to stablize the mintable/redeemable ratio for $1. Based on the price of the stablecoin, the ratio of the two assets (collateral and FXS) varies significantly.
If the stablecoin price falls, the protocol shifts the ratio toward collateral and away from the FXS token to restore trust in FRAX. People who want to put collateral into the pool at the new discounted FXS ratio that the protocol mints for this "recollateralization swap" have an arbitrage opportunity. In return, this recollateralizes the protocol to the new, higher collateral ratio.
Proposal: FRAXswap Early Liquidity Budget
The Frax ecosystem will be soon adding 3 features:
- FPI (including the FPIS airdrop).
Not only in a stablecoin protocol but also in whatever one, integrating more and more features to a protocol is hard but extremely needed for its further development. As Frax's constinuous updating roadmap, we both hope to see an outburst circumstance in the near future.