Frax Share (Ethereum)

FXS

FXS is the governance and value-accrual token of the Frax protocol and can be used as collateral to mint the protocol's FRAX stablecoin.

Risk Rating
Average
$5.03
4.25%
Summary
What we like
FXS leverages the vote escrow tokenomics (popularized by Curve) to incentivize users to lock up their tokens to receive protocol rewards and voting power.
What we like less
FXS has potentially concerning reflexivity as it is used to mint and redeem for the FRAX stablecoin based on the current collateralization ratio, which can lead to negative feedback loops in volatile market conditions.
What it means for you
FXS offers you solid value accrual mechanisms from minting and redeeming fees as well as revenue earned from its algorithmic market operations (AMO) controller.
Information
Blockchain
  • Ethereum
Info
Key Metrics
  • Market Cap: $396.1M
  • Fully Diluted Valluation: $499.6M
  • FDV / MC: 1.3
  • Ranking inside Exponential (excluding stables): #38
  • Circulating Supply: 79,040,613
  • Total Supply: 99,681,496
  • Total Supply: 99,681,496
  • Volume (24H): $23.3M
  • ATH: $42.80 (01/12/2022)
  • ATL: $1.50 (06/25/2021)
Risk Assessment
Average
Asset Strength

FXS is a low-cap asset that represents the blockchain`s native currency or monetary fee used to execute transactions on the network. This asset is exposed to the underlying risks of Frax, a protocol rated as Watch out.

Asset Tokenomics

FXS has a fixed supply. FXS is exposed to death spiral risk as its price depends on another asset, thus creating negative feedback loops. FXS can be used to mint the FRAX stablecoin and the latter can be redeemed for FXS, thus creating negative feedback loops when FRAX holders redeem in mass and sell FXS for other stablecoins.

Asset Volatility

FXS is moderately correlated to the overall market.

Dependencies

Frax

Things to know about FXS

What is FXS used for?

The FXS token is used to govern the protocol and give holders the ability to submit proposals and potential changes to the allocation of pool rewards. The amount of voting power a user has is determined by how many FXS tokens are staked and for how long. The longer FXS is staked (max of four years), the more voting rights are granted.

FXS tokenomics

The total supply of FXS was initially hard capped to 100M tokens. The initial supply includes 60M tokens distributed to the community for yield farming programs and DeFi initiatives (maximum one year emission between 18-30M depending on the collateral ratio of FRAX), 5M to a community governed treasury, and 35M to the team and investors (20% team, 3% strategic advisors and early contributors, 12% accredited private investors). The actual supply is intended to be deflationary as long as there is demand for FRAX and while it is minted at higher collateral ratios.

How does FXS accrue value?

FXS has value accrual mechanisms through its power to promote certain pools across its AMO and locking mechanism to accrue rewards for long-term liquidity providers. Voters determine the different allocations of FXS tokens to each pool, which can boost rewards for liquidity providers. Users are also incentivized to lock their FXS tokens within the protocol in return for veFXS tokens. FXS lockers are entitled to fees generated from minting and redeeming as well as by the protocol's several product lines.