The information about Frax (FRAX) token is:

Frax (FRAX) is a stablecoin launched on the Ethereum blockchain as part of the Frax Finance ecosystem, designed to maintain a value pegged closely to $1 USD. It operates as an ERC-20 token, making it compatible with Ethereum-based decentralized applications and wallets.

Introduced in November 2020, FRAX is notable for being the first fractional-algorithmic stablecoin, a hybrid model that combines collateralized and algorithmic mechanisms to stabilize its value. This distinguishes it from fully collateralized stablecoins like USDT or purely algorithmic ones.

The Frax Protocol, which powers FRAX, uses a dual-token system. FRAX is the stablecoin itself, while Frax Shares (FXS) serves as the governance and value-accrual token. The supply of FRAX is dynamic, adjusting through minting and burning to maintain its peg, influenced by market conditions.

The fractional-algorithmic design means that part of FRAX’s supply is backed by collateral—initially USDC—and part is uncollateralized, managed algorithmically. The collateral ratio adjusts based on demand: it decreases when FRAX’s value exceeds $1, requiring less collateral, and increases when it falls below $1.

FRAX is fully decentralized, open-source, and permissionless, running entirely on-chain with governance managed by FXS holders. This structure aims to provide a scalable alternative to fixed-supply digital assets like Bitcoin, blending stability with flexibility.

The protocol integrates with on-chain oracles, such as Uniswap and Chainlink, to determine pricing and adjust the collateral ratio, ensuring stability without centralized control. This reliance on smart contracts enhances transparency and autonomy.

Posts on X and website data highlight that FRAX was created by Sam Kazemian, with contributions from Travis Moore and Jason Huan, building on Kazemian’s observation that stablecoins lacked a hybrid collateral-algorithmic approach before Frax’s inception.

The total supply of FXS is capped at 100 million tokens, while FRAX has no fixed supply, allowing it to expand or contract as needed. Over 60% of FXS was initially distributed to liquidity providers and yield farmers to bootstrap the ecosystem.

FRAX’s utility extends to DeFi platforms like Uniswap and Curve, where it’s used for trading, liquidity provision, and yield farming, reflecting its role as a stable medium of exchange within the broader Ethereum ecosystem.

The Frax ecosystem has since evolved, with plans noted on X for rebranding FRAX to frxUSD as part of the North Star Proposal (v2.1) in 2025, signaling a shift toward a fully collateralized model backed by real-world assets, though this response focuses on its original launch design.