Shortly after the emergence of the blockchain and cryptocurrencies in 2009, there was a need to create cryptocurrencies that mimic the stability of fiat currencies like the US dollar. This led to the creation of stablecoins pegged 1:1 to popular Fiat currencies like the US Dollar and the Euros, among others. The stablecoins create the relative price stability other free cryptocurrencies like Bitcoin do not have.<\/p>\n\n\n\n
The stablecoin is, however, not without its challenges. Several stablecoin protocols are designed as fully collateralized (backed by other currencies) or completely algorithmic with no backing. The problem with both designs is that the collateralized coins, even though they create a reasonably tight peg that provides higher confidence, usually have custodial risk and on-chain over-collateralization. In contrast, the algorithmic coins, although they provide highly trustless and scalable models that capture the essence of decentralization which is the core of blockchain, with excellent stability, algorithmic designs are challenging to scale due to their substantial data needs and experience intense periods of volatility which diminishes confidence in their capacity to maintain stability as stablecoins.<\/p>\n\n\n\n
Frax attempts to solve the problems of stablecoins by creating designs that bring scalability, trustless environment, stability, and ideologically on-chain money to stablecoins. Frax was launched in 2020 as a hybrid design for stablecoins that combines the strengths of collateralized and algorithmic currencies.<\/p>\n\n\n\n
Frax Protocol presents the first fractional-algorithmic stablecoin platform that is open-source, Permissionless, and has an entirely on-chain design. The protocol was deployed on the Ethereum network. The primary goal of Frax is to create a highly scalable, decentralized, algorithmic money that replaces fixed-money supply digital currency options like Bitcoin.<\/p>\n\n\n\n
The Frax Protocol has the following built-in functionalities which guide the functioning of the protocol:<\/p>\n\n\n\n
Before the emergence of Frax, stablecoins were categorized into Fiat collateralized, Over-collateralized and Algorithmic. The emergence of Frax created the first-of-its-kind stablecoin called the fractional-algorithmic coin.<\/p>\n\n\n\n
Frax allows users to mint the stablecoins by providing the appropriate amount of its parts into the system. At the launch of the Frax protocol, it was 100% collateralized. The fractional phases require placing the correct collateral ratio and burning the ratio of FXS. While the protocol was created to accept any coins as collateral, Frax only accepted stable coins as collateral at inception to ease out volatility so that Frax could more readily transition to more algorithmic ratios. Over 60% of FXS has been issued to liquidity providers and farmers. Frax runs a decentralized protocol with on-chain governance.<\/p>\n\n\n\n
To make the most precise price predictions, we will examine Frax’s fundamental strengths with emphasis on the scalability and collaborations of the stablecoin protocol.<\/p>\n\n\n\n
The Frax Protocol is built on the Ethereum network, hence, giving the protocol wide room for future expansion and scaling. With the deployment of ETH 2.0, there is no limit to the expansion of Frax.<\/p>\n\n\n\n
In 2021, Cryption Network partnered with Frax (FRAX). The partnership was motivated by mutual benefits for the partnering networks. While the Cryption Network would employ the Frax Protocol to create and add liquidity to Polydex, Cryption will create a staking pool for FXS and reward the stakers with CNT tokens. Cryption would also add the ‘Mint Frax’ function to the Cryption app, allowing Cryption users to mint Frax without leaving the Cryption app; finally, Cryption will create a dual farm that would farm FSX and CNT simultaneously.<\/p>\n\n\n\n
Frax partnered with Retrograde, a protocol built on the Astroport platform which allows Astro stakers and liquidity providers to get the best experience. The primary aim of the partnership is to employ Retrogrades’ expertise in blockchain development toward bringing Frax tokens on the Terra platform.<\/p>\n\n\n\n
In 2022 Frax partnered with Zenlink, the first native cross-chain decentralized exchange based on the Polkadot platform. The partnership aimed to help Frax expand onto the Moonbeam network and drive the widespread adoption of Frax on the Moonbeam network.<\/p>\n\n\n\n
Another important partnership was the one with Synfutures. Frax’s aim of partnering with Synfuture was for Frax to provide liquidity to its stable coin trading pairs on the Synfutures network while Synfuture would open its platform for Frax users to trade and engage.<\/p>\n\n\n\n
Frax is currently worth $<\/b>0.991602<\/span><\/span><\/span><\/strong> USD. FRAX has moved 0.04%<\/span><\/span><\/strong> in the last 24 hours with a trading volume of