KPIs & Market Data
Frax is a fractional-algorithmic stablecoin protocol pegged 1:1 to USD. The protocol is governed by the Frax Shares token (FXS). Frax is combining on-chain collateral with a price-stability algorithm to ensure price stability while maintaining capital efficiency in a decentralized way. The protocol guarantees that FRAX can always be exchanged against $1 of value allowing arbitrageurs to balance the price around $1. The algorithm for price stability is a mint-and-burn algorithm against its governance token FXS similar to other algorithmic stablecoins.
- Smart Contract Risk
- Death Spiral under adversarial conditions (Bank run scenario) in case the collateral is devalued (unlikely, but depending on market conditions contagion effects could happen)
- Hyperinflation of price-floating coin
- Loss of funds due to de-peg
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