- Category: Decentralized Finance
- Coin Launched: November, 2020
- Resources: White Paper
- Official Website: Frax
- Reddit: Frax
FRAX History / Information / Buying / Staking
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. The founding team of Frax engineers includes Travis Moore and Jason Huan. Sam Kazemian originally devised the idea when he noticed that stablecoins were growing rapidly but none had any mixture of algorithmic monetary policy and collateralization. Projects that had purely algorithmic monetary policy had 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 FRAX WORKS
The Frax crypto project is amongst the first to have a stablecoin that utilizes characteristics from both collateralized and algorithmic models: FRAX token. The project intends its token to function as “scalable, trustless, stable, and on-chain money.” The Frax crypto protocol utilizes two different assets: the Frax (FRAX) stablecoin (which is built to maintain a peg to $1 USD), and the Frax Shares (FXS) governance and utility token (which is used to support the platform’s various functions).
BENEFITS OF USING FRAX
Some of the benefits of using Frax are:
COMMUNITY DRIVEN / UNIQUE STABLE COIN
60% SUPPLY OF FXS IS ISSUIED OVER NUMBER OF YEARS TO LIQUIDITY PROVIDERS AND YIELD FARMERS
ONLY STABLE COIN TO INCORPORATE THE FRACTIONAL ALGORITHMIC HYBRID DESIGN
CAN YOU STAKE FRAX
On Frax, liquidity providers (LPs) are able to lock their LP tokens into the protocol for up to 3 years. The amount of rewards liquidity providers accrue is determined by two boost factors: the amount of time the asset is locked for, and the collateral ratio. The time locked boost means that the longer the user locks their tokens into Frax, the higher their rewards will be; the collateral ratio boost is in direct proportion to the base emission rate of FXS, meaning that an increase in this metric should result in more distributed FXS across the entire ecosystem.
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