FRAX (prev. FXS)

Overview

Frax (prev. FXS) is the primary governance and utility token of the Frax universe, underpinning the ecosystem’s assets and subprotocols. It grants holders voting rights in protocol decisions and control over liquidity incentives, while capturing the economic value generated by the platform via targeted reward mechanisms. FRAX serves as the native token of Frax’s own blockchain (Fraxtal) where it functions as the gas currency and will in the future be used to secure the network through staking.

Key Features

Governance Control

FRAX holders (via locked veFRAX) vote on Frax Improvement Proposals (FIPs) that set key protocol parameters, determine strategic partnerships, and allocate portions of FRAX emissions toward ecosystem growth and community initiatives.

Staking Rewards

Users lock FRAX into a voting escrow contract to obtain veFRAX, which boosts their voting power and entitles long‑term holders to protocol revenue rewards (e.g., sfrxUSD, plus ecosystem partner tokens - FIP-428 (opens in a new tab)).

Tail Emission Tokenomics

FRAX’s supply follows a tail emission schedule designed for sustainable growth. The token has an annual inflation of 8% initially (FIP-428 (opens in a new tab)), which decreases by 1% each year until reaching a floor of 3% after 6 years. These controlled emissions are allocated to various purposes (such community initiatives, Fraxtal ecosystem growth, team expansion, and the DAO treasury) to continuously fund the ecosystem while gradually reducing inflation over time.

Cross-Chain & Network Utility

FRAX is implemented as part of Frax Mesh system (opens in a new tab), enabling seamless availability on many chains (Ethereum, Fraxtal, Arbitrum, Optimism, Sonic, and more). FRAX is also used to pay gas fees on Fraxtal and will be required for staking in Fraxtal’s upcoming proof-of-stake validator system, further expanding its utility beyond DeFi into network security.