Frax (prev. FXS)Price

(FRAX)

In a significant strategic move, Frax Finance has rebranded its governance and utility token, FXS, to FRAX. This new FRAX token now serves as the primary governance and utility asset for the entire Frax ecosystem. To maintain clarity and avoid confusion, the original USD-pegged stablecoin, previously known as FRAX, has also been rebranded and is now known as frxUSD. Essentially, the old FXS is now the new FRAX governance token, while the stablecoin has a different name, frxUSD.

The necessary steps depend on where your FXS tokens are held. If your FXS tokens are stored on a centralized crypto exchange, the conversion to the new FRAX token is typically handled automatically by the exchange. Users holding FXS directly on-chain in their personal wallets, however, will need to manually migrate their tokens. This can be done by using the official Frax dashboard, which provides the necessary tools and instructions for the seamless conversion of FXS to the new FRAX ticker.

Fraxtal is Frax's newly launched Ethereum Layer 2 rollup blockchain. Its primary purpose is to scale the Frax ecosystem, offering faster transactions, lower fees, and enhanced network capacity for all Frax-related applications and users. A key feature is its utilization of the new FRAX token (formerly FXS) as its native gas token, deeply integrating it into the network's operations. Fraxtal also introduces a unique blockspace incentive system called Flox, which rewards users and developers with FXTL points for their gas spending and smart contract interactions, fostering ecosystem activity and growth.

No, the Frax stablecoin, now known as frxUSD, is no longer an algorithmic stablecoin in the traditional sense, and it cannot experience a "death spiral" like UST. Following community consensus, the project made a significant shift to operate with a 100% collateralization ratio (CR). This means that every frxUSD stablecoin is fully backed by reserves, eliminating the reliance on complex algorithmic mechanisms that could lead to de-pegging under stress. While it still employs "Algorithmic Market Operations" (AMOs), these are designed to safely manage yield and maintain stability through transparent and well-collateralized operations, ensuring robust backing for the stablecoin.

Within Frax's liquid staking system, frxETH and sfrxETH serve different purposes. frxETH is a liquid staking derivative that is pegged to the value of Ethereum (ETH). It functions as a stablecoin representation of ETH and does not inherently accrue staking rewards directly to its holders. Its value remains consistent with ETH. In contrast, sfrxETH is the "staked" version of frxETH. When users hold sfrxETH, they are actively participating in the staking process and automatically earn all the staking rewards generated from the entire Frax liquid staking pool. This means that the price of sfrxETH is designed to increase relative to ETH over time, reflecting the accumulated staking yield.

The veFXS system, now known as veFRAX, operates as Frax's powerful vote-escrow governance and utility mechanism. Users can obtain veFRAX by locking their FRAX tokens (formerly FXS) for a chosen duration, ranging up to four years. The longer the lock-up period, the more veFRAX an individual receives, granting them greater influence. By holding veFRAX, users gain several key benefits: enhanced governance voting power over protocol proposals, boosted yields when providing liquidity in various Frax liquidity pools, and a direct share of the protocol's generated revenue, often referred to as seigniorage. This system aligns user incentives with the long-term success and growth of the Frax ecosystem.