What is Frax (prev. FXS) (FRAX)?

Deep Dive

1. Core Blockchain Infrastructure

FRAX serves as the foundational asset of the Fraxtal blockchain, functioning as its native gas token and validator security collateral. Unlike typical governance tokens, it’s designed as a “commodity asset” with monetary properties similar to Bitcoin – its supply follows a predetermined emission schedule that can’t be altered (Frax Docs).

2. Deflationary Economics

The protocol combines controlled inflation with aggressive burning:
- Tail Emission: Starts at 8% annual inflation, decreasing 1% yearly until stabilizing at 3%
- Frax Burn Engine (FBE): Permanently removes tokens via network fees and ecosystem activities (e.g., domain registrations, base fee burns)

3. DeFi Integration Layer

When staked as veFRAX (vote-escrowed FRAX), the token governs parameters across Frax’s DeFi ecosystem, including:
- Stablecoin collateralization (sFRAX)
- Liquidity pool incentives
- Cross-chain strategies (e.g., Balancer integrations on Fraxtal)

Conclusion

Frax has transitioned from algorithmic stablecoin origins into a multi-chain monetary primitive – combining blockchain infrastructure, programmable scarcity, and DeFi governance. Its success now hinges on whether Fraxtal can establish itself as a hub for restaking economies while maintaining FRAX’s value accrual mechanisms. How will competing L1s adapt to Frax’s hybrid model of monetary policy and chain sovereignty?