📝 Hello everyone, I am 𝟏𝟎, welcome back to the #BlockchainDevelopmentHistory project research series. Today, we will focus on (Frax Share / FXS).

Frax Share employs a unique partial algorithmic stablecoin mechanism, balancing stability and efficiency, attracting a large number of DeFi users and investors.

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1. What is Frax Share ($FXS)

Frax Share ($FXS) is the world's first partially algorithmic stablecoin launched in December 2020, combining collateral (such as USDC) and algorithmic adjustments, not fully relying on collateral like USDT nor purely algorithmic like Terra.

$FXS is not only a governance token but also a value capture tool. The Frax ecosystem covers various sectors such as FRAX (stablecoin), Frax Ether (LSD staking), FPI (CPI-linked stablecoin), and Fraxland (lending).

Holding $FXS not only allows participation in governance but also enjoyment of profits, including lending interest, Frax Ether staking returns, and validator fees.

2. How Frax Share ($FXS) Works

1. Fractional Algorithm Model

The value of FRAX is supported by both collateral and algorithmic adjustments. Collateral (such as USDC) provides real value, while the algorithm adjusts dynamically based on supply and demand, ensuring stability. The ratio is adjusted according to market changes: when demand is high, the collateral ratio is lowered, strengthening algorithmic adjustments; when demand is low, the collateral ratio is increased, enhancing stability.

2. The Role of $FXS

$FXS holders are equivalent to 'shareholders' of the protocol, able to vote on collateral ratio adjustments and profit distribution, enjoying governance rights while participating in profit dividends, essentially similar to holding company stocks.

3. Minting & Burning $FRAX

To mint, USDC and a certain amount of $FXS must be provided, and the system generates new $FRAX; during burning, $FRAX is redeemed, returning some $FXS and USDC, and burning some $FRAX to control supply, stabilizing the $FRAX price at 1 dollar, while the more it is used, the higher the value of $FXS.

3. The Role and Token Economics of Frax Share ($FXS)

1. Earning from Staking: You can lock $FXS to earn income generated by the protocol, such as interest and transaction fees, making money easily.

2. Participate in Governance: You can vote to determine the future direction of the protocol—whether to launch new features or adjust existing parameters.

3. Value Growth: As the usage of $FRAX increases, the demand for $FXS may rise accordingly, driving up the price.

▌ Token Economics

$FXS has a maximum supply of 100 million, with a current circulation of about 75 million. Its main uses include governance, staking, and dividends. As scarcity increases, the value potential of $FXS also rises, becoming a core pillar of the Frax ecosystem.

The token distribution is as follows:

Strategic Advisors / External Early Contributors: 3.01%

Qualified Private Investors: 12.04%

Team / Founders / Early Project Members: 20.06%

Community: 64.89%

4. Cooperation and Ecosystem Development of Frax Share ($FXS)

Frax has deeply integrated with mainstream DeFi ecosystems, establishing close collaborations with multiple protocols, demonstrating its strong influence in the decentralized finance field.

1. Curve Finance: Frax is one of the main stablecoin pools on Curve, providing liquidity support.

2. Aave: FRAX can be used as collateral for lending, increasing capital efficiency.

3. Uniswap: Frax and FXS have a place in the DEX trading market.

5. Competitive Advantages of Frax Share ($FXS) Compared to Other Stablecoins

1. Efficiency (vs DAI): Frax improves capital efficiency through partial algorithmic adjustments, while DAI relies entirely on collateral, resulting in low capital utilization.

2. Reliability (vs USDD): Frax has deeply integrated into multiple DeFi protocols, far exceeding the reliance on the TRON ecosystem of USDD.

3. Stability (vs LUNA): Frax combines collateral and algorithmic adjustments, avoiding the collapse risk of LUNA's purely algorithmic mechanism.

6. The Multifunctional DeFi Ecosystem of Frax Share ($FXS)

1. Frax Ether (FraxETH): A liquid staking token (LSD) that maintains liquidity while staking ETH, ensuring no missed opportunities.

2. FPI: A stablecoin linked to the consumer price index, breaking through the limitations of traditional stablecoins, bringing new gameplay.

3. Sub-protocols: Fraxland is a decentralized lending market providing lending opportunities for users. Frax Swap: A trading platform providing a seamless asset exchange experience.