Frax Share

What is Frax share?

Frax Share Token, Frax Shares or FXS is a utility token of the Frax protocol. The latter is a hybrid stablecoin protocol. Frax works for Ethereum blockchain. The name Frax comes from its unique technology called fractional algorithmic protocol.

The Frax protocol runs on two tokens – FRAX and FXS.

FXS is based on the ERC-20 token standard and primarily serves governance token for intranet management of the Frax Share protocol.

The Frax Share token can be used to pay for features on the Frax platform. This includes key activities such as minting and redemption of FRAX stablecoins.

Moreover, FXS paid as crypto rewards for users who place bets their tokens in liquidity pools.

Frax users can also lock up their Frax Share tokens and receive veFXS, a non-transferable token that provides an agricultural advantage and exclusive management rights. The maximum blocking period is set at 4 years.

Unlike the FRAX stablecoin, FXS tokens have a maximum limit. Its volume is 100,000,000 FXS tokens. This means that there will never be more than the maximum limit of FXS tokens.

Additionally, the cap could cause the price of the FXS token to increase as it becomes increasingly scarce.

Since FRAX is a cryptocurrency, its price tends to fluctuate. To make an informed buying decision, you can take a closer look at FXS price history or the current Frax share price in the chart above.

What is the Frax Protocol?

As discussed in the “What is Frax Share” section, Frax is a hybrid stablecoin protocol. What do we mean by hybrid? Frax takes two types of stablecoins—fully collateralized and fully algorithmic—and combines them into one..

Fully backed stablecoins can also be divided into stablecoins backed by fiat currency and stablecoins backed by other cryptocurrencies. In turn, this creates three types of stablecoins. That was until Frax changed the rules of the game by creating a completely new type of stablecoin.

Some of the main advantages of the Frax protocol are that it Addresses issues common to other types of stablecoins, such as increased volatility, custodial risk, and sluggish growth.

It is important to note that before the advent of the FRAX stablecoin, there were many projects that attempted to implement a partially backed stablecoin. However, they all failed, with the exception of the Frax crypto project.

There is no maximum limit for FRAX stablecoins. This is because FRAX’s offering is constantly changing.

The ratio of secured supply to programmatic supply is based on the market price of FRAX.. If it exceeds $1, the secured supply is reduced. On the other hand, if it is below $1, the secured supply increases.

For example, if demand for the FRAX stablecoin drops, FRAX will end up being almost 100% backed.

In fact, there was a point where FRAX was fully collateralized.
When the project was first launched, the team had to add collateral to the minting contracts. The latter is responsible for creating FRAX and recording FXS.

The mechanism behind the FRAX stablecoin itself is quite complex. It is a multi-chain fractional algorithmic protocol with a pool contract.

The main function of these pools is to provide users with the ability to mint and redeem FRAX stablecoins. At the time of writing, there is only one type of Frax Pools, secured by collateral. USDC.

Other types of Frax pools can be implemented by successfully submitting a proposal to the Frax DAO.

Frax is a completely open source project. This means that the project code is publicly available for review.

One of the main goals of the project is to provide a type of algorithmic money with improved stability and scalability.

Besides, Frax aims to create a new stablecoin standard. They plan to do this by introducing a crypto equivalent Consumer Price Index (CPI) called the FRAX Price Index (FPI).

Frax Share has been audited by independent blockchain security companies Certik and Trail of Bits.

Who developed Frax Share?

The Frax Share cryptocurrency project was launched in November 2020. It is a software company co-founded by entrepreneurs. Sam Kazemian, Jason HuangAnd Travis Moore.

However, it was Sam Kazemian who came up with the idea for the project in 2019. He highlighted the fact that while stablecoins are growing in popularity, they are either fully collateralized or based on algorithmic monetary policy.

So he decided to combine these two aspects and provide the stablecoin market with a unique type of stablecoin that is both collateralized and algorithmic.

Sam Kazemian also co-founded Everipedia, a blockchain-based educational platform, with Travis Moore.

On the other hand, Frax Share was Jason Huang’s first blockchain-based venture.

Be sure to check the FRAX price using the tracker above before making your purchasing decision.