Frax

What is Frax (FRAX)?

The Frax Protocol is the first-of-its-kind fractional-algorithmic stablecoin system. As an open-source, permissionless, and entirely on-chain platform, Frax aims to offer highly scalable, decentralized, algorithmic money as an alternative to fixed-supply digital assets like BTC. Currently implemented on Ethereum, the Frax Protocol combines fractional-algorithmic stablecoin mechanisms, decentralized governance, fully on-chain oracles, and a dual-token system.

What makes Frax Unique?

Frax is a distinctive stablecoin that employs a hybrid approach, combining collateral-backed and algorithmic elements. The collateral ratio adjusts based on market fluctuations of the FRAX stablecoin's value. With community governance at its core, the protocol emphasizes a self-regulating, algorithm-driven approach without direct management. Frax v1 utilizes Uniswap and Chainlink oracles, and the FRAX stablecoin aims to maintain a close value of $1 per coin. Frax Shares (FXS) function as the governance token, accumulating fees, seigniorage revenue, and surplus collateral value.

As the first decentralized stablecoin to identify itself as fractional-algorithmic, Frax introduces an innovative category within the stablecoin sector. The FRAX stablecoin's supply is flexible, continually adjusting to preserve its $1 target price. In contrast, the Frax Shares (FXS) tokens have an initial cap of 100 million tokens and no planned inflation schedule.

The Frax Protocol is a community-led initiative, with over 60% of FXS supply distributed over several years to liquidity providers and yield farmers. It operates as a fully decentralized protocol featuring on-chain governance and is the first and only stablecoin to implement the fractional-algorithmic hybrid design since its debut in November 2020.

You can also get FRAX tokens on Gate.io, Uniswap (V3), Curve Finance, and Jubi.

Who made Frax?

The Frax Protocol was initially conceptualized by Sam Kazemian, a software developer from the United States. In 2019, he introduced the notion of a stablecoin that combines fractional and algorithmic elements. Kazemian, along with engineers Travis Moore and Jason Huan, formed the founding team of Frax. Kazemian noticed the rapid growth of stablecoins but saw no combination of algorithmic monetary policy and collateralization. Projects with purely algorithmic monetary policy failed to gain significant traction, leading to the creation of Frax as a solution.

Frax Crypto Pros and Cons

Pros:

• Unique fractional-algorithmic stablecoin design.
• Decentralized and community-governed.
• A dual-token system with distinct purposes.
• Adaptable and scalable stablecoin.

Cons:

• Relatively new in the stablecoin space.
• Market adoption may take time.

Frax Finance Review

Frax Finance offers a unique and innovative approach to stablecoins with its fractional-algorithmic system. The platform's decentralized governance, dual-token system, and adaptability set it apart from its competitors. However, it faces challenges in the stablecoin space and may take time to gain widespread market adoption.

We also did a security review on Frax Protocol and we've discovered that most of the smart contracts associated with this project have a mint function embedded in its code, as well as a trade pause function. A hidden owner is also detected on multiple smart contracts.

While the project does seem to use these functions essential to running the protocol, it is worth highlighting that these can be security risks if abused by the contract owners or if the protocol is hacked by hackers.

Is Frax Finance a Scam?

There don't seem to be any signs that Frax Finance is a scam. The project is open-source and seems to have a clear vision of where the project should be headed. Its unique approach to combining algorithmic monetary policy and collateralization has garnered attention from users and investors.

But before you commit to investing in this, or any blockchain project, you must DYOR thoroughly. Avoid scams by informing yourself of the latest tactics and developments in the crypto space. Always weigh your risks and minimize them as much as possible. Make this a habit and you'll surely increase your chances of thriving in the cryptocurrency sphere.

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