Frax Share price

FAQ About Frax Share (FXS)

• What Is Frax Share (FXS)?

  FXS (Frax Share) is the governance and utility token of the Frax Finance protocol, supporting the operation and management of some algorithmic stablecoins FRAX.

• How does the Frax Protocol maintain FRAX's 1:1 peg to the US dollar?

  FRAX uses a ""fractional-algorithmic"" stablecoin model. It is neither fully collateralized nor purely algorithmic but combines both approaches.
  
  How it works:
  Collateral backing: A portion of each FRAX token is backed by collateral such as USDC.
  Algorithmic regulation: The remaining portion is managed through the FXS token and algorithmic controls.
  
  When FRAX trades above or below $1, arbitrage mechanisms activate. Users can mint new FRAX by providing collateral and burning FXS or redeem FRAX for collateral, helping restore its price to the $1 peg.
  

• Is the FXS token supply inflationary or deflationary?

  FXS is designed to be potentially deflationary. It has a maximum supply of 100 million tokens, but the protocol’s mechanisms, such as FXS burning from arbitrage and protocol profits, gradually reduce the circulating supply over time.

• How does Frax's approach differ from fully fiat-backed (USDT/USDC) or fully collateralized (DAI) stablecoins?

  Frax introduced the fractional-algorithmic model to improve capital efficiency and scalability compared to fully collateralized stablecoins. It combines collateral-backed stability with algorithmic control, functioning as a flexible and programmable monetary unit.

• What is the total supply of FXS?

  The maximum supply of FXS is 100 million tokens, with a portion allocated for community incentives and protocol development.

• Is FXS a good long-term investment?

  FXS serves as the governance token of the Frax stablecoin system and has potential for long-term growth within the DeFi ecosystem.

• Is FXS deployed on multiple blockchains?

  Yes, the Frax protocol operates across multiple blockchains, including Ethereum, Polygon, and BNB Chain.

• Does FXS support stablecoin minting?

  Yes, FXS is used to regulate the minting and burning of FRAX, helping maintain its price stability..

• What is Frax Share (FXS) Used For?

  Frax Share (FXS) is the native governance token of the Frax protocol and serves multiple key functions within its ecosystem.