Overview
The Frax Share token (FXS) serves as the non-stable utility and governance token within the Frax Finance ecosystem, complementing the FRAX stablecoin. Designed for volatility, FXS governs protocol parameters, allocates assets, and enables new features like Fraxlend lending pairs. Its capped supply of 100 million tokens ensures scarcity, with surplus income distributed to veFXS holders.
Key Features of FXS
Governance Rights
- Parameter Adjustments: FXS holders vote on fees, asset allocation, and protocol upgrades.
- veFXS Benefits: Locking FXS as veFXS grants boosts in farm weights and income streams.
Economic Model
- Fixed Supply: Hard-capped at 100 million tokens since genesis.
- Value Accrual: Captures upside from FRAX seigniorage, fees, and collateral utilization.
Evolution of FXS: From V1 to V2
Original Model (V1)
- Hybrid Minting: Required both FXS and stablecoins (e.g., USDC) to mint FRAX.
- Dynamic Ratios: Collateral percentages adjusted based on market conditions.
- Deflationary Design: FXS supply reduced as FRAX demand grew.
👉 Explore how AMOs revolutionized FRAX minting
Current Model (V2+)
- AMO Integration: Minting delegated to Automated Market Operations (AMOs).
- Continued Utility: FXS retains governance, income distribution, and veFXS perks.
FAQs
What is veFXS?
veFXS represents locked FXS tokens, enabling holders to earn protocol income and governance power.
How is FXS supply controlled?
FXS has a fixed cap of 100 million tokens, ensuring scarcity and value retention.
Can FXS be used to mint FRAX directly?
Not in V2+. Minting is handled by AMOs, while FXS focuses on governance and utility.
Why FXS Matters
FXS acts as the backbone of Frax Finance, balancing stability (FRAX) with growth potential. Its design ensures long-term value accrual while maintaining decentralization.
👉 Learn more about Frax Finance’s ecosystem
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