Frax Finance is a decentralized protocol focused on developing stablecoins and a suite of supporting products across DeFi verticals like lending, liquidity, and staking. Its flagship offering is FRAX, a USD-pegged stablecoin partially collateralized by assets like USDC and algorithmically stabilized through its governance token FXS. Originally launched in December 2020 as a fractional algorithmic stablecoin, FRAX transitioned to a fully collateralized model in 2023 following the UST crash.
Frax Finance has continuously expanded its ecosystem with products like the FraxSwap decentralized exchange (launched June 2022), utilizing the Time-Weighted AMM concept, FraxLend money markets for borrowing FRAX, and frxETH, its liquid staking derivative for Ethereum. The frxETH v2 launched in May 2023 redefined LSDs by facilitating ETH lending to validators, with yields paid as interest to frxETH stakers.
As of September 2023, Frax Finance operated across 16 blockchains with over USD 797 million in total value locked (TVL) across offerings. Its forthcoming endeavor, FraxChain, combines strengths of Optimistic and zero-knowledge rollups, using frxETH as the gas token to bolster ecosystem value. Slated for a 2023 launch, FraxChain aims to improve scalability, finality, and security compared to competitors.
In April 2024, Frax Finance partnered with Noble to expand FRAX and sFRAX natively to the Cosmos ecosystem of around 80 blockchains, boosting adoption across applications like trading, savings, payments and collateral.
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