FXS is the governance and value-capture token of Frax Finance, the DeFi protocol that invented the “fractional-algorithmic” stablecoin. Frax’s FRAX stablecoin sits between fully-collateralized and fully-algorithmic: at launch, FRAX was partially backed by USDC collateral and partially by FXS, with the ratio determined algorithmically by market demand. When FRAX is minted, FXS is burned; when FRAX is redeemed, FXS is minted. This mechanism made FXS the residual value capture vehicle for the entire Frax ecosystem — which expanded to include Fraxswap, Fraxlend, frxETH liquid staking, and the FXS → FPIS governance overhaul.
| Stat | Value |
|---|---|
| Ticker | FXS |
| Price | $0.43 |
| Market Cap | $40.91M |
| 24h Change | -0.7% |
| Circulating Supply | 95.42M FXS |
| Max Supply | 100.00M FXS |
| All-Time High | $42.80 |
| Contract (Ethereum) | 0x3432...64d0 |
| Contract (Fantom) | 0x7d01...af5a |
| Contract (Polygon Zkevm) | 0x6b85...cace |
| Contract (Moonriver) | 0x6f1d...0e98 |
| Contract (Evmos) | 0xd817...4a9c |
| Contract (Solana) | 6LX8Bh...W7ct |
| Contract (Harmony Shard 0) | 0x0767...c14c |
| Contract (Polygon Pos) | 0x1a3a...9062 |
| Contract (Binance Smart Chain) | 0xe48a...b9ee |
| Contract (Arbitrum One) | 0x9d2f...88a7 |
| Contract (Avalanche) | 0x214d...e387 |
How It Works
Original fractional-algorithmic model:
At launch, the Frax collateral ratio was ~100% USDC. As demand grew and the peg held, governance reduced the collateral ratio over time (down to ~80% at various points), with the remaining 20% backed “algorithmically” by FXS value. Minting 1 FRAX required depositing the collateral portion in USDC + burning the algorithmic portion in FXS.
Full collateralization (2023 shift):
Following Terra/UST’s collapse (which destroyed confidence in algorithmic stablecoins), Frax governance voted to move FRAX to full collateralization. FRAX is now targeting 100% backing, eliminating algorithmic risk.
Frax ecosystem products:
| Product | Description |
|---|---|
| FRAX | The flagship stablecoin |
| FPI (Frax Price Index) | CPI-pegged inflation-resistant stablecoin |
| Fraxswap | Native AMM with TWAMM (time-weighted AMM) |
| Fraxlend | Isolated lending markets |
| frxETH / sfrxETH | Liquid staking token for ETH; sfrxETH accrues all ETH staking yield |
| frxBTC | BTC-backed synthetic (in development) |
veFXS:
Users lock FXS for up to 4 years to receive veFXS, which earns protocol revenue (from Fraxswap fees, Fraxlend interest, frxETH yield) and boosts yield on Frax liquidity positions.
Tokenomics
| Allocation | Amount | Notes |
|---|---|---|
| Team | 20,000,000 FXS | Vesting schedule |
| Investors | 3,500,000 FXS | Vesting |
| Treasury/grants | 5,000,000 FXS | DAO-controlled |
| Community/farms | 60,000,000 FXS | Emitted over years via AMO programs |
Max supply: 100,000,000 FXS. FXS supply is partially deflationary — burned during FRAX minting (when collateral ratio < 100%) and through protocol fee buybacks.
Note: FXS is not currently supported by ChangeNow. Users can trade FXS on Uniswap, Curve, or centralized exchanges.
Use Cases
- Protocol governance — veFXS controls AMO (algorithmic market operations) strategy, collateral parameters, and treasury
- Revenue sharing — veFXS earns yield from Fraxswap fees, Fraxlend interest, and frxETH staking yield
- Frax ecosystem staking boosts — veFXS boosts rewards for providing liquidity to Frax-related pools
- FXS buyback and burn — Protocol revenue is used to buy and burn FXS, creating deflationary pressure
History
- Dec 2020 — FRAX and FXS launch with initial collateral ratio of 100%; partial-algorithmic model becomes the design target
- 2021 — FRAX grows to top-10 stablecoins; Frax pioneered the “algorithmic collateral ratio” concept later mimicked by Terra’s Luna
- May 2022 — Terra/UST collapses; Frax founder Sam Kazemian immediately pivots to emphasize Frax’s collateralization, contrasting with UST’s 0%-collateral model
- 2022 — Frax introduces FPI (Frax Price Index), Fraxswap, and Fraxlend; the ecosystem expands beyond just a stablecoin
- 2023 — frxETH becomes a significant liquid staking competitor; Frax governance votes to move to full collateralization; FXS undergoes rebrand/governance restructuring discussions
- 2024 — Frax V3 introduces Ether-backed FRAX and continues expanding the ecosystem; frxETH TVL surpasses $500M
Common Misconceptions
“FXS is unsafe because FRAX was algorithmic.” Frax’s partial-algorithmic model was meaningfully different from Terra’s 0%-collateral design. Since 2023, FRAX targets full collateralization. FXS risk relates to Frax ecosystem growth, not algorithmic instability.
“FXS and FRAX are the same.” FRAX is the stablecoin. FXS is the governance/value-capture token for the ecosystem that issues FRAX. They serve very different functions.