What Is Frax Share Crypto? A Complete Analysis of FXS Crypto

Frax Share (FXS) is a volatile utility token in the Frax protocol, which is the first fractional-algorithmic stablecoin system. 

Frax Share (FXS) is the volatile utility token in the Frax protocol, designed to hold governance rights and play a key role in the system’s utility. Emphasizing a governance-reduced approach, FXS gives its community the power to make important decisions related to the protocol, such as adding or changing collateral pools, altering fees, and updating the collateral ratio. 

However, active management of collateral and other human-changeable parameters is not allowed, ensuring a trustless and stable approach similar to Bitcoin’s philosophy.

The FXS token serves as the utility and governance token of the Frax protocol. Holders of FXS have governance rights, enabling them to affect critical parameters in the system while avoiding the difficulty of active management found in some other decentralized autonomous organizations (DAOs). 

These governance rights include changing collateral pools, fees, and the collateral ratio. As the supply of FXS is expected to be deflationary with growing FRAX demand, it offers upside and downside utility for the protocol. 

The FXS token’s market capitalization is calculated based on the expected net value creation from FRAX seigniorage in perpetuity, minting and redemption fees, and the utilization of unused collateral. As the market cap of FXS increases, so does the protocol’s ability to maintain FRAX’s stability. The main goal of the design is to maximize the value of FXS while ensuring FRAX remains a stable currency, following a hybrid (fractional) seigniorage shares model.

Why is the Frax Share Crypto Different?

The Frax Protocol is a community-driven and unique design stablecoin. Over 60% of the supply of FXS is issued over several years to liquidity providers and yield farmers. It is a fully 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.

How Can You Buy Frax Share Crypto?

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

The highest price of Frax crypto is $42.80, registered on Jan 12, 2022, about 2 years ago. Comparatively, the current price is 78.26% lower than the all-time high price.

Conclusion

Frax Share (FXS) is the governance and utility token of the Frax protocol, which is the first fractional-algorithmic stablecoin system. FXS gives its community the power to make crucial decisions related to the protocol while accruing fees, revenue, and excess collateral value. FXS is designed to maximize its value while ensuring FRAX remains a stable currency, following a hybrid (fractional) seigniorage shares model. FXS is available and as liquid as FRAX, the stablecoin of the Frax protocol, which is a community-driven and unique design stablecoin with a fully decentralized and on-chain governance.

Anurag is working as a fundamental writer for The Coin Republic since 2021. He likes to exercise his curious muscles and research deep into a topic. Though he covers various aspects of the crypto industry, he is quite passionate about the Web3, NFTs, Gaming, and Metaverse, and envisions them as the future of the (digital) economy. A reader & writer at heart, he calls himself an “average guitar player” and a fun footballer.