In the evolving world of decentralized finance (DeFi), few projects stand out quite like Frax Finance and its unique token, Frax Share (FXS). Imagine a stablecoin ecosystem where blending algorithmic mechanisms with traditional collateral offers unprecedented stability and scalability. Frax Share isn't just another DeFi token; it's the backbone of a revolutionary monetary protocol. From governance and staking to robust liquidity provision, the potential use cases of FXS make it a fascinating topic for any crypto enthusiast. So, what exactly sets Frax Share apart from the myriad of digital assets on the market? Read on to discover how Frax Share aims to redefine the landscape of stablecoins and decentralized finance.

What Is the Frax Protocol (FRAX)?

The Frax Protocol is the first fractional-algorithmic stablecoin system. Frax is open-source, permissionless, and entirely on-chain – currently implemented on Ethereum with potential cross-chain implementations in the future. The end goal of the Frax protocol is to provide a highly scalable, decentralized, algorithmic money in place of fixed-supply digital assets like Bitcoin (BTC). The protocol incorporates several innovative concepts:

Fractional-Algorithmic

Frax is a unique stablecoin with parts of its supply backed by collateral and parts of the supply algorithmic. The ratio of collateralized and algorithmic depends on the market's pricing of the FRAX stablecoin. If FRAX is trading above $1, the protocol decreases the collateral ratio. Conversely, if FRAX is trading below $1, the protocol increases the collateral ratio.

Decentralized & Governance-Minimized

Frax is community-governed and emphasizes a highly autonomous, algorithmic approach with no active management. This minimizes the need for centralized control and enhances the protocol's resilience and scalability.

Fully On-Chain Oracles

Frax v1 uses Uniswap (ETH, USDT, USDC time-weighted average prices) and Chainlink (USD price) oracles to ensure accurate and reliable price feeds.

Two Tokens

The Frax ecosystem comprises two tokens: FRAX and Frax Shares (FXS). FRAX is the stablecoin targeting a tight band around $1 per coin, while FXS is the governance token that accrues fees, seigniorage revenue, and excess collateral value.

Before Frax, stablecoins were divided into three categories: fiat-collateralized, overcollateralized with cryptocurrency, and algorithmic with no collateral. Frax introduces a fourth and most unique category: fractional-algorithmic stablecoins.

How Many FRAX and FXS Coins Are There in Circulation?

The supply of the FRAX stablecoin is dynamic and always changing to keep the price at $1 due to its fractional-algorithmic monetary policy. The supply of Frax Shares (FXS) tokens is hard-capped at 100 million tokens at genesis with no inflation schedule in the protocol. The FXS token is the governance token that accrues all value from newly minted FRAX, fees, and excess collateral. FXS serves as both an investment and governance asset, while FRAX functions as the currency token.

What Makes Frax Unique?

The Frax Protocol is a community-driven and uniquely designed stablecoin. Over 60% of the supply of FXS is issued over several years to liquidity providers and yield farmers. It is an entirely decentralized protocol with on-chain governance. Frax is also the first and only stablecoin to incorporate the fractional-algorithmic hybrid design, launched in November 2020.

Who Are the Founders of the Frax Protocol?

The Frax Protocol is the brainchild of American software developer Sam Kazemian, who conceived the 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 with purely algorithmic monetary policies had failed or shut down without significant traction. Frax was designed to measure the market's confidence in a partly algorithmic and partly collateralized stablecoin.

Where Can I Buy or Obtain FRAX and FXS?

FRAX, the stablecoin, is available on many major exchanges and DeFi platforms like Uniswap and various decentralized exchanges (DEXes). Frax Shares (FXS) tokens are also available and as liquid as the stablecoin. Investors looking to purchase upside and governance rights to the world's first fractional-algorithmic stablecoin should buy Frax Shares (FXS). Users seeking stability through the world's only fractional-algorithmic stablecoin should purchase FRAX.

Tokenomics and Distribution Model of Frax Share (FXS)

The Frax Share (FXS) tokenomics and distribution model are designed to balance the need for a large amount of rewards for early adopters while ensuring long-term community sustainability. The total supply of FXS is 100 million tokens, distributed as follows:

Team and Investors (35% - 35,000,000 FXS)

• 20% (20,000,000 FXS): Allocated to the team, founders, and early project members, vested over 12 months with a 6-month cliff.
• 3% (3,000,000 FXS): Allocated to strategic advisors and outside early contributors, vested evenly over 3 years.
• 12% (12,000,000 FXS): Allocated to accredited private investors, with 2% unlocked at launch, 5% vested over the first 6 months, and 5% vested over 1 year with a 6-month cliff.

Community (65% - 65,000,000 FXS)

• 60% (60,000,000 FXS): Allocated to liquidity programs, farming, and the community, distributed via gauges and governance, with emissions halving naturally every 12 months.
• 5% (5,000,000 FXS): Reserved for the project team treasury, grants, partnerships, and security bug bounties, used at the team's discretion.

Mechanisms to Control Inflation

The Frax protocol employs several mechanisms to control inflation, such as token burning and staking rewards. The total supply of FXS is not fixed and can fluctuate depending on the amount of FXS that is burnt and minted. The protocol's economic model concentrates its potential upside and downside in FXS.

The Team Behind Frax Share

The Frax Share (FXS) crypto token is backed by a team with diverse qualifications and experience in the blockchain and relevant industries. The core team members include:

• Sam Kazemian: Founder of Frax Finance, Sam Kazemian, first conceived the idea of a stablecoin with a fractional algorithm in 2019. He is an American software developer with a strong background in computer science and a passion for decentralized finance (DeFi).
• Travis Moore: An experienced software engineer with a focus on blockchain technology and decentralized systems.
• Jason Huang: A skilled software engineer with expertise in smart contract development and blockchain infrastructure.

The team has a strong background in computer science and a passion for decentralized finance