Last Updated: March 2026
Frax pioneered the fractional-algorithmic stablecoin model — partially collateralized, partially algorithmic. It has evolved into a multi-product DeFi suite including liquid staking (frxETH), lending, and an L2 (Fraxtal).
History
Founded by Sam Kazemian. FRAX launched in 2020 as the first fractional stablecoin. Unlike purely algorithmic stablecoins (Terra/UST, which collapsed), FRAX maintained its peg by combining real collateral with algorithmic mechanisms. Now transitioning to fully collateralized. See stablecoin guide.
Frax Products
- FRAX: Stablecoin pegged to $1 (transitioning to fully collateralized)
- frxETH/sfrxETH: Liquid staking ETH derivative. See ETH staking
- Fraxlend: Lending protocol with isolated markets
- Fraxtal: Frax’s own L2 chain (OP Stack). See L2 guide
- FPI: Inflation-pegged stablecoin (tracks CPI)
Tokenomics
FXS: Governance + value accrual token. Revenue from all Frax products accrues to FXS. veFXS: Lock FXS for boosted rewards and governance. See tokenomics.
Pros and Cons
- Pro: Multi-product DeFi suite (stablecoin + staking + lending + L2)
- Pro: Maintained peg when Terra/UST collapsed
- Pro: Transitioning to fully collateralized (removing algorithmic risk)
- Con: Complex product suite confuses new users
- Con: Stablecoin market is very competitive (USDC, DAI, USDe)
Frequently Asked Questions
Is Frax safe to use?
Frax has been audited but all DeFi carries smart contract risk. Use established protocols and start with small amounts.
Is Frax a good investment?
Evaluate based on real revenue, TVL growth, and token utility. Best as a small DeFi allocation alongside BTC and ETH.
How do I use Frax?
Connect a Web3 wallet (MetaMask or Phantom) to the protocol’s website. Start with small amounts to learn the mechanics.
