Frax Share: Everything You Need to Know
Frax Share (FXS) is a cryptocurrency token that represents the governance rights and value capture of the Frax Protocol, the world’s first fractional-algorithmic stablecoin system. FXS holders can participate in the decision-making process of the Frax Protocol, as well as benefit from the fees, seigniorage revenue, and excess collateral value generated by the protocol12.
How does Frax Share work?
Frax Share works by following a set of mechanisms that enable FXS holders to:
Vote on proposals and parameters that affect the Frax Protocol, such as the collateral ratio, the redemption fee, the minting fee, and the seigniorage allocation2.
Stake FXS tokens to earn rewards from various sources, such as FRAX inflation, FXS inflation, protocol fees, and liquidity mining incentives.
Burn FXS tokens to redeem collateral from the protocol’s treasury, which consists of a basket of assets such as USDC, ETH, renBTC, and more.
Trade FXS tokens on various platforms, such as Uniswap, SushiSwap, Balancer, and KuCoin.
FXS tokens have a fixed supply of 100 million at genesis, with no inflation schedule in the protocol. However, FXS tokens can be minted or burned by the protocol based on certain conditions. For example, when FRAX is trading above $1, the protocol mints new FXS tokens and distributes them to FXS stakers as seigniorage revenue. When FRAX is trading below $1, the protocol burns FXS tokens from the treasury to reduce the supply and increase the demand.
Who is the team behind Frax Share?
Frax Share is part of the Frax Protocol, which was developed by a group of anonymous developers who go by the pseudonyms of Sam Kazemian (co-founder), Travis Moore (co-founder), Jason Huan (co-founder), and Daniel Sihao Lim (co-founder). The team has extensive experience and expertise in blockchain, cryptography, economics, and software engineering.
The Frax Protocol is also supported by a number of advisors and investors, such as Anthony Pompliano (co-founder of Morgan Creek Digital), Sam Bankman-Fried (CEO of FTX), Robert Leshner (founder of Compound), Michael Arrington (founder of TechCrunch), and more.
What are the use cases for Frax Share?
Frax Share can be used for various purposes by different types of users, such as:
Governance participants: Frax Share can help governance participants to influence the direction and development of the Frax Protocol, as well as monitor and audit its performance and security.
Yield seekers: Frax Share can help yield seekers to earn attractive returns from staking FXS tokens and receiving rewards from multiple sources.
Value investors: Frax Share can help value investors to gain exposure to the growth and innovation of the Frax Protocol, as well as benefit from the appreciation of its collateral basket.
Crypto traders: Frax Share can help crypto traders to access a liquid and volatile market for FXS tokens, as well as hedge their risks and diversify their portfolio.
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