Frax
Crypto Overview
Overview
Frax is a fractional-algorithmic stablecoin protocol launched in December 2020. The protocol aims to create a highly scalable, decentralized, algorithmic money in place of fixed-supply digital assets like BTC. The FRAX stablecoin is designed to maintain a tight peg to the US Dollar through a unique hybrid design that is partly collateralized and partly algorithmic.
Intended Utility
The primary purpose of FRAX is to serve as a stable medium of exchange and unit of account in the crypto ecosystem. The protocol uses a two-token system: FRAX (the stablecoin) and FXS (the governance token). The stability mechanism works by dynamically adjusting the collateral ratio based on market demand, with FRAX being partially backed by USDC collateral and partially stabilized through algorithmic mechanisms.
Actual Usage & Adoption
FRAX has achieved significant adoption in the DeFi ecosystem, with over $1.3 billion in total circulating supply as of 2024. The stablecoin is widely integrated into major DeFi protocols and exchanges. On-chain data shows consistent usage for trading, liquidity provision, and as a stable store of value.
Technology & Development
The protocol demonstrates active development with regular updates and improvements. The team has expanded the ecosystem to include various financial products like Frax Price Index (FPI), Frax Share (FXS), and Fraxlend. The project maintains transparency through open-source code and detailed documentation.
Founder Analysis
The project was founded by Sam Kazemian and Travis Moore, who have maintained consistent involvement. The team has demonstrated commitment to development over marketing, with regular technical updates and protocol improvements. Token distribution shows a balanced allocation with appropriate vesting schedules for team members.
Crypto Impact
To assign a comfort level investing in Frax from a halal perspective we need to determine whether it has a net positive or negative impact.
Towards this end, the table below is used to tally all the positive and negative considerations our members can think of related to Frax.
If you don’t see something that should be listed, positive or negative, feel free to submit your own contribution using the button “Contribute”.
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Importantly, you can review listed contributions and vote on which one you think has the greatest impact, positive or negative.
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