What is Frax (prev. FXS) (FRAX)?

Deep Dive

1. Purpose as a Native Monetary Unit

FRAX is fundamentally the base money of the Fraxtal blockchain. According to its documentation, it is "the only native monetary unit of the Fraxtal blockchain and Frax ecosystem" (Frax). It serves as the native gas token to pay for transactions and will be used to secure the network by validating it. Crucially, it is not a governance token itself but a commodity asset, similar to how Bitcoin is viewed as a store of value. This design aims to provide a stable foundation for the ecosystem where holding the asset is not subject to dilution from not staking.

2. Technology and Tokenomics

FRAX is natively issued on Fraxtal, not bridged from other chains. Its supply is governed by a transparent, fixed tail emission schedule. Inflation starts at 8% annually, decreasing by 1% each year until reaching a 3% floor, funding ecosystem growth (Frax). A key feature is the Frax Burn Engine (FBE), which permanently removes tokens from circulation through ecosystem activities like paying base fees, introducing a deflationary counterweight to emissions.

Conclusion

FRAX is fundamentally the scarce, native asset that powers and secures the Fraxtal blockchain, combining the properties of a gas token, a store of value, and a foundation for decentralized finance. How will its fixed emission schedule balance ecosystem funding with long-term scarcity?