# A basic intro to Frax Finance empire

By [Prcrypto](https://paragraph.com/@prcrypto) · 2023-07-18

---

[**_Frax finance_**](https://frax.finance/) is a suite of DeFi protocols aimed at giving the best of experiences in the crypto world.

![](https://storage.googleapis.com/papyrus_images/af6936cb94383545c7456552b4523c8a1d9ace6a4c3b437a63480e1cd4bbc9eb.webp)

History
-------

⁃ began as Decentral bank

⁃ Rebranded to Frax Finance

The Defi empire
---------------

The empire consists of a stablecoin, an AMM, a lending protocol, a bridge, a liquid staking derivative and an upcoming layer 2 chain.

1\. Frax stablecoin
-------------------

It’s was partially backed by USDC and algorithmic allowed to float but after the TerraUSD collapse, it reverted to been fully collaterized by USDC. The ecosystem has 3 stablecoins, according to their documentation

> The Frax Protocol currently issues 3 stablecoins. FRAX, a USD pegged asset. The Frax Price Index (FPI) stablecoin, the first stablecoin pegged to a basket of consumer goods creating its own unit of account separate from any nation state denominated money. FraxEther (frxETH), pegged to ETH for use as a replacement for WETH in smart contracts.

2\. FraxSwap
------------

It is the first AMM to be built using the Paradigm TWAMM(time weighted automated market maker).

![](https://storage.googleapis.com/papyrus_images/7665a9b2d08f459ac71ee1690b4b9d770124b4e6207301bab1674ae5a6f35c7e.webp)

[https://app.frax.finance/swap/main](https://app.frax.finance/swap/main)

It gives for the execution of large orders over time with little to minimal price fluctuations

It is used for the buyback of FXS from the market

3\. Frax Lend
-------------

Works like Aave or other lending protocols, you can borrow FRAX against assets as collateral.

![](https://storage.googleapis.com/papyrus_images/a4333a21b8e2e276f74c25903c3faac517539051db4c4333bf79fedc06357083.webp)

[https://app.frax.finance/fraxlend/available-pairs](https://app.frax.finance/fraxlend/available-pairs)

4\. Frax Ferry ⛴
----------------

Frax finance products are deployed across multiple chains, more than 12+ chains, the ferry is to allow for seamless bridging of Frax assets across any supported chains.

![](https://storage.googleapis.com/papyrus_images/fd2045b91ea18e44badfed3df4b5c11def97f24eb4977558af51312feaf5c3df.webp)

It’s an in-house [**bridge**](https://app.frax.finance/fraxferry) .

5. [Frax Ether](https://app.frax.finance/frxeth/mint)
-----------------------------------------------------

Appeared October 2022, since then it’s been growing aggressively.

![](https://storage.googleapis.com/papyrus_images/0effec61257f45db1845aac2ca699b59389dbc8f87a49907cbfc298db5d66952.webp)

[https://facts.frax.finance/frxeth](https://facts.frax.finance/frxeth)

The v2 of FrxETH will see all Liquid staking derivatives LSDs as lending Ethereum to validators , users deposits Ethereum in any LSD form, it gets lent to Node operators after they have dropped some form of collateral. Stalkers receive interest payments as a form of yield.

6\. Frax Share
--------------

It is the governance token of the protocol, it accrues fees, revenue and excess collateral value and gives it back to veFXS holders

7\. Frax chain
--------------

![](https://storage.googleapis.com/papyrus_images/1ec97227592b136e9dcb1cd484b6210d4734b436ebd03a77b835acc0f654fad1.webp)

[https://twitter.com/FlywheelDeFi/status/1669463865116209152?ref\_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1669463865116209152%7Ctwgr%5Ef02765064a74be855bfe3972bbec3c75ad252dc6%7Ctwcon%5Es1\_&ref\_url=https%3A%2F%2Fcoinmarketcap.com%2Falexandria%2Farticle%2Fwhat-is-fraxchain](https://twitter.com/FlywheelDeFi/status/1669463865116209152?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1669463865116209152%7Ctwgr%5Ef02765064a74be855bfe3972bbec3c75ad252dc6%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Fcoinmarketcap.com%2Falexandria%2Farticle%2Fwhat-is-fraxchain)

⁃ It will be a hybrid rollup( it will combine the best of optimistic and zero knowledge rollups)

⁃ It will integrate Frax ferry to expose the Frax empire to the new chain

⁃ It will use FrxETH as gas

⁃ These fees will be paid to holders of veFXS which means more profit accrual to those who locked FXS

⁃ More use of FrxETH will reduce the staked supply of FrxETH and increase the yield for staked FrxETH hodlers

⁃ It plans to use account abstraction accounts

⁃ It’s expected to launch by 2024

> **Reader, how do you see Frax Finance in the next few years.**

originally published **_here_** by me

---

*Originally published on [Prcrypto](https://paragraph.com/@prcrypto/a-basic-intro-to-frax-finance-empire)*