Before we get started, this is not a recommendation or endorsement to buy any token mentioned.
In 2020, one of the bolder stablecoin projects to go live with a new protocol that would miraculously survive both the bull market and current bear market was FRAX by Frax Finance. The FRAX stablecoin has boasted an all-time-high circulating supply of $2.9B in March 2022 and remains at over $1.018B in supply as of January 2023. Although I’ll cover their newest pegged ETH token frxETH, it’s worth digging briefly into their impressive suite of DeFi products launched over the years.
FRAX: Named after this hybrid fractional-reserve system, the first and only stablecoin with parts of its supply backed by collateral (ie USDC) and parts of the supply algorithmically stabilized.
Fraxswap: The first AMM with time weighted average market maker orders used by the Frax Protocol for rebalancing collateral, mints/redemptions, expanding/contracting FRAX supply, and deploying protocol owned liquidity on-chain.
Frax Price Index (FPI): A crypto native CPI-pegged stablecoin, the first pegged to a basket of consumer goods creating its own unit of account separate from any nation state denominated money.
Fraxlend: A permissionless lending market for the FRAX and FPI stablecoins allowing debt origination, customized non-custodial loans, and onboarding collateral assets to the Frax Finance digital economy.
A Four-Token System: FRAX being the stablecoin pegged to $1 per token. Frax Share (FXS) is the governance token of the Frax ecosystem of smart contracts which accrues fees, seigniorage revenue, and excess collateral value. FPI is the inflation resistant, CPI-pegged stablecoin and lastly, FPIS is the governance token of the Frax Price Index and splits its value capture with FXS holders.