The Frax Protocol is the first fractional-algorithmic stablecoin system. Frax is open-source, permissionless, and entirely on-chain – currently implemented on Ethereum, Avalanche, BSC, Fantom, and Solana. It is a unique stablecoin with parts of its supply backed by collateral and parts of the supply algorithmic. The ratio of collateralized and algorithmic depends on the market's pricing of the FRAX stablecoin. If FRAX is trading above $1, the protocol decreases the collateral ratio. If FRAX is trading below $1, the protocol increases the collateral ratio. Frax Finance brings together the best of both worlds, eliminating the issues of collateral-backed stablecoins and fully algorithmic stables to produce the first fractional-algorithmic stablecoin protocol.

The project, formerly called Decentral Bank, was founded by Sam Kazemian, Travis Moore, and Jason Huan in May 2019. FRAX is a two-token protocol consisting of FRAX, the stablecoin, and Frax Shares (FXS), the governance token. The protocol also utilizes a pool contract that holds USDC collateral. The minting and redemption of FRAX rely on interacting with the FXS token, ensuring that the amount of FRAX minted is equivalent to the amount of value committed to the protocol. Frax v1 is the first iteration of the fractional algorithm used to create FRAX, while Frax v2 introduced Algorithmic Market Operations controllers (AMOs) to enact fully autonomous monetary policies on the Frax protocol. The development of a crypto native Consumer Price Index (CPI) is also underway, which will enable FRAX to become the first truly decentralized and permissionless crypto native unit of account.

The Frax Protocol is the first fractional-algorithmic stablecoin system. It is open-source, permissionless, and entirely on-chain, currently implemented on Ethereum. The goal of the Frax protocol is to provide a highly scalable, decentralized, algorithmic money. It incorporates concepts such as fractional-algorithmic, decentralized & governance-minimized, and fully on-chain oracles. It has two tokens, FRAX and Frax Shares (FXS). Before Frax, stablecoins were divided into three different categories, but Frax is the first decentralized stablecoin to classify itself as fractional-algorithmic.

The supply of the FRAX stablecoin is dynamic and always changing to keep the price at $1 due to its fractional-algorithmic monetary policy. The supply of Frax Shares (FXS) tokens is hard capped at 100 million tokens at genesis with no inflation schedule in the protocol. FXS is the governance token which accrues all value of new minted FRAX, fees, and excess collateral.

The Frax Protocol is a community-driven and unique design stablecoin. Over 60% of the supply of FXS is issued over a number of years to liquidity providers and yield farmers. It is an entirely decentralized protocol with governance on-chain. It is also the first and only stablecoin to incorporate the fractional-algorithmic hybrid design at the time of its launch in November 2020.

The Frax Protocol is the brainchild of American software developer Sam Kazemian. The founding team of Frax engineers includes Travis Moore and Jason Huan. Frax was designed as an answer to measure the markets confidence in a partly algorithmic and partly collateralized stablecoin.

FRAX, the stablecoin, is available on many major exchanges and DeFi platforms like Uniswap and DEXes. Frax Shares (FXS) tokens are also available and as liquid as the stablecoin. Investors looking to purchase upside and governance rights to the worlds first fractional-algorithmic stablecoin should buy Frax Shares (FXS). Users who want stability by using the worlds only fractional-algorithmic stablecoin should purchase FRAX.