Frax Shares (FXS): Project Review, Recent Developments, Future Events, Community

Two humans standing and staring at Flax Share logo.
  • The first fractional-algorithmic stablecoin system, Frax Finance, has been on a roll, gobbling up market cap in the decentralized finance (DeFi) sector.
  • Its Ethereum staking program, frxETH, now holds $104.98 million, from just $50 million at the start of January.
  • The massive interest in Frax Share (FXS) has seen the token receive listings on major exchanges, including ByBit and Binance.
  • In the last seven days, FXS has gained 55%, outperforming the top 100 cryptos ranked by market cap.

Project Review

Frax Shares is part of a two-token system in the Frax Protocol, an open-source, permissionless, and entirely on-chain protocol built on Ethereum. Frax Protocol is the first fractional-algorithmic stablecoin system.

The Frax Finance protocol is partially backed by collateral and partially stabilized algorithmically. FXS is the governance token for generating fees, revenue, and excess collateral value. 

The other half, FRAX stablecoin (FRAX), maintains a peg to the U.S. dollar by being partly collateralized by the USD coin (USDC). Frax Shares are also periodically bought and sold to maintain the market capitalization of FRAX.

Holders of FXS are incentivized to invest in the token because FRAX’s minting mechanism creates demand for FXS. As FRAX tokens are minted, a proportional number of FXS tokens are burned, further driving the price of FXS higher.

Social Media: Website | Twitter | GitHub | Discord | Telegram | Audit

Recent Developments and Future Events

Frax’s strong product lineup, especially its liquid staking derivatives (LSD) has been one of its most talked-about features. While FRAX-USDC generates an Annual Percentage Rate of 10%, holding FRAX-FXS can earn you an APR of 49% on Optimism.

Frax’s staked ether (frxETH) product, which was launched in October, has begun amassing capital for its 10% APR. At the time of this writing, frxETH holds $104.98 million from just $50 million at the start of January.

Source: DeFiLlama

The massive growth of the frxETH product is because of the edge it has over its competitors. While it offers staking APR of up to 10%, the closest ETH staking competitor of Frax Finance offers 5%.

On January 20th, leading crypto exchange Bybit announced the upcoming listing of $FXS on its Spot trading platform. While $FXS deposits were opened on the same day, withdrawals will be available from January 21st, 2023.

This comes just a day after Binance Futures announced the launch of an FXS perpetual contract with up to 20x leverage. The rapid growth of Frax has attracted more users to the project, helping its price grow.

Price Updates

Frax Shares (FXS) is crypto’s top gainer over the last week, with the price of the token jumping by 55.3%. In the last month, FXS has doubled its price, making it one of the best-performing crypto assets.

The 7-day price chart of Frax Shares (FXS). Source: CoinMarketCap

In the last 24 hours, FXS has also been pumping, gaining 11%. As a result of the recent gains, the price of FXS has crossed the $10 mark for the first time since May 2022, when the Terra ecosystem collapsed.

The 24-hour price chart of Frax Shares (FXS). Source: CoinMarketCap

FXS now trades at $10.12 and is ranked as the 58th largest cryptocurrency with a market cap of $728 million.

On the Flipside

  • While Frax Shares has been pumping, a fake airdrop is being promoted on Twitter to distribute the FXS token.
  • The account being aggressively promoted on Twitter is named “Fraxfinace” instead of “Frax Finance.”

Community

Frax Shares is growing into one of the largest communities in the DeFi space, thanks to its market-leading liquid staking derivatives programs.

Remarking on its products, crypto market builder @ShaharAbrams writes:

Blockchain and DeFi researcher Thor Hartvigsen in a thread shared reasons why the Frax community should be excited about 2023.

Crypto trader @CryptoDefiLord is bullish about FXS, writing:

Why You Should Care

The remarkable staking product of Frax Finance continues to give it a competitive advantage. As the unlocking of staked ETH draws closer, the volume of frxETH is expected to increase even further. These advantages could make Frax Finance a major player in the DeFi sector as it gains more popularity.

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
Milko Trajcevski

Milko Trajcevski is a DailyCoin news reporter, mainly focused on Ethereum (ETH), Cardano (ADA), and their founders (Vitalik Buterin and Charles Hoskinson). Milko is an avid follower of crypto and blockchain technology and has written thousands of articles on the subjects. He finds joy in transforming complex issues into written content that anyone can understand. Milko has used and analyzed numerous exchanges, such as Coinbase, FTX, and Binance. He also closely follows all of the latest news around the largest decentralized exchanges (DEXs). Location: Skopje, Macedonia