What is Frax?
Frax: Fractional-algorithmic stablecoin using USDC and FXS for stability.
Frax is a unique stablecoin that combines collateral backing with algorithmic mechanisms to maintain its value. Unlike purely algorithmic stablecoins, Frax is partially backed by assets like USDC, while its stability is also managed by smart contracts that adjust the supply based on price fluctuations. The Frax protocol utilizes two tokens: FRAX, which is pegged to the US dollar, and FXS, a governance token. Key features include minting and redeeming FRAX using USDC and FXS, with the ratio determined by the collateral ratio. Frax Finance also offers liquidity providing opportunities on Uniswap and long-term staking options. Future plans involve FRAX bonds and new collateral types, aiming to enhance FRAX's utility as a stablecoin. You can purchase FRAX on decentralized exchanges like Uniswap and Sushiswap.
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