Frax (FRAX)
Frax Finance is a decentralized finance protocol offering a suite of stablecoins, lending markets, AMMs, and a modular Layer 2 chain.
Overview
Frax Finance is a decentralized finance (DeFi) protocol that provides a comprehensive ecosystem centered around algorithmic stablecoins, lending markets, automated market makers (AMMs), and a modular Layer 2 blockchain. It currently issues three primary stablecoins: FRAX, a USD-pegged asset; FPI, a stablecoin pegged to a basket of consumer goods creating a novel unit of account; and frxETH, a liquid staking derivative token pegged to ETH. These tokens are integrated into various subprotocols that enable collateral management, liquidity provision, and decentralized governance.
The protocol includes Fraxswap, a native AMM based on Uniswap V2 with enhancements like time-weighted average market maker (TWAMM) orders for efficient rebalancing and liquidity deployment. Fraxlend is a permissionless lending market that supports customized non-custodial loans and collateral onboarding, while the Borrow AMM (BAMM) module enables borrowing and lending without reliance on external oracles or liquidity. Frax also operates multiple Algorithmic Market Operation (AMO) contracts to manage collateral and generate revenue, including integrations with Curve and Uniswap V3.
Frax extends its ecosystem with Fraxtal, a modular Layer 2 chain built on Optimism technology that uses frxETH as its native gas token. Users can earn Fraxtal Points (FXTL) for activities on Fraxtal, incentivizing engagement. Governance is managed through the Frax Share (FXS) token and its locked variant veFXS, which provide voting power and reward distribution control. The protocol also supports cross-chain transfers of Frax tokens via Fraxferry, enhancing interoperability. Frax Finance targets DeFi developers, financial institutions, infrastructure teams, DAO tooling developers, and tokenization platforms seeking scalable, decentralized stablecoin and lending solutions.
Developers can get started by exploring the comprehensive documentation, deploying Frax smart contracts, and integrating Frax stablecoins and lending markets into their applications. The protocol’s modular design and open governance enable flexible customization and participation in ecosystem growth.
The Problem
Stablecoins often face challenges in maintaining their peg reliably while balancing decentralization and collateralization. Lending markets can depend heavily on external oracles and liquidity, increasing risk and complexity. Layer 2 solutions may lack native integration with DeFi stablecoins and derivatives, limiting composability and user incentives.
The Solution
Key Features
Fraxswap AMM with TWAMM Orders
Native automated market maker enhanced with time-weighted average market maker orders for efficient liquidity rebalancing.
Fraxlend Permissionless Lending Market
Supports customized, non-custodial loans and onboarding of diverse collateral assets.
Fraxferry Cross-Chain Transfers
Enables native bridging of Frax tokens across multiple blockchains.
Key Strengths
How Developers Use Frax (FRAX)
Stablecoin Integration for DeFi Applications
Developers integrate FRAX and FPI stablecoins into DeFi protocols to provide reliable, algorithmic-backed stable assets with unique peg mechanisms.
Permissionless Lending and Borrowing
Projects leverage Fraxlend and BAMM modules to offer decentralized lending markets without dependency on external oracles or liquidity pools.
Building on Fraxtal Layer 2 Chain
Developers deploy scalable dapps on Fraxtal, benefiting from native frxETH gas token and integrated governance incentives.
Works Well WithEthereumAvalancheBNB Smart ChainFantom
Arbitrum One
Optimism
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Pricing
Free | |
|---|---|
| Price (Monthly) | Free |
| Price (Annual) | Free |
| Messaging | N/A |
| Support | Community support via Discord and Telegram |
| Analytics |
Resources
Frax Finance provides extensive documentation covering its stablecoins, AMMs, lending markets, Layer 2 chain, governance, and cross-chain bridges. The docs include technical specifications, contract addresses, governance guides, and tutorials to help developers integrate and build on the Frax ecosystem.