Frax   token: ico review, security check & audits

check date
Sun Jun 13 2021
Source code
-
Address
0x853d955acef822db058eb8505911ed77f175b99e
Market Cap(24h)
$14,239,684
0.14 %
Status
COMPLETED
ICO Rating
10
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Overview

FRAX is the first stablecoin combining the principles of collateralized and algorithmic alternatives.

The existing solutions for maintaining cryptocurrencies at a stable rate tend to fall into one of the two extremes, collateralized and algorithmic, that come with their own faults. Collateralized stablecoins either imply the risks associated with a single issuing company or require on-chain overcollateralization. In fact, the idea of the project was born during the crisis of Tether when the crypto community was unpleasantly surprised by the fact that it was only partially backed by dollar reserves.

Algorithmic designs provide their users with a trustless and scalable model but fail to provide real stability and are difficult to bootstrap. FRAX combines the best features of both approaches and creates a highly scalable, trustless, and at the same time stable on-chain money. The collateral ratio is controlled by the protocol which decreases it if FRAX is traded above $1 and vice versa.

The FRAX protocol relies on a two-token system. In addition to the stable FRAX token, it also implements a governance token FRAX Shares (FXS). Its key use cases cover minting, redeeming, governance, staking, and rewards.

At genesis, FRAX was 100% collateralized. To mint new coins, users only had to place collateral into a minting contract. When the project moved to the next fractional phase, an appropriate ratio of collateral was required with a defined ratio of FXS being burned. Although in the beginning the system mainly accepted stable coins as collateral to reduce the volatility, with its growth, it has become possible to include volatile coins as well.

Frax token price chart

Security checks of FRAX token