FRAX, issued by the Frax Protocol smart contracts under the governance of frxGov onchain governance, is a U.S. dollar (USD) pegged stablecoin maintained against exogenous collateral at a minimum 100% collateralization ratio [S1][S2].

FRAX targets a 1:1 peg to the U.S. dollar (USD) and is backed by exogenous collateral held on a segregated protocol balance sheet at a minimum 100% collateralization ratio enforced through algorithmic market operations contracts [S2]. FRAX does not pass yield to holders directly; protocol cash flow from AMOs, Fraxlend, and Fraxswap fees is used to buy back the FXS governance token and distribute it weekly to veFXS stakers [S1].

FRAX is not issued by a single corporate entity; it is issued by decentralized smart contracts governed onchain through the frxGov module, which the documentation describes as eliminating multi-signature trust assumptions, with real-world assets held by governance-approved partner entities [S2]. Holding FRAX is characterized as fiat-like money that does not give the holder a right to underlying assets on demand; FRAX is explicitly non-redeemable [S3][S1]. FRAX is usable permissionlessly across DeFi protocols and chains with no stated KYC or eligibility gate, and reserves sit on a segregated balance sheet maintained independently from frxUSD [S4][S1].

FRAX uses modified ERC-20 smart contracts deployed across Ethereum, Arbitrum, Avalanche, Base, Blast, BSC, Fraxtal, Optimism, Polygon, Solana, TRON, zkSync, and other networks [S1]. It is minted and redeemed through onchain AMO mechanics, with FXS no longer required to mint, and settles onchain; the peg tracks USD via Chainlink oracles and governance-approved reference rates [S1][S2].

<Sources
  retrievedAt="2026-06-21"
  items={[
    { id: "S1", url: "https://docs.frax.finance/" },
    { id: "S2", url: "https://docs.frax.finance/frax-v3-100-cr-and-more/overview" },
    { id: "S3", url: "https://docs.frax.finance/?ask=Is%20FRAX%20redeemable" },
    { id: "S4", url: "https://gov.frax.finance/t/fip-430-preparation-for-frxusd-payment-stablecoin-charter-compliance/3698" },
  ]}
/>


Stablecoins

Users deposit funds into Frax Finance and receive frxUSD stablecoin (previously FRAX).

Frax Finance is the principal architect of frxUSD - a crypto collateralized stablecoin pegged to the US dollar. Frax Finance was founded by Sam Kazemian, Stephen Moore, Jason Huoan & Travis Moore and launched in 2019.

FRAX (previously FXS) tokenholders own and govern the Frax Finance protocol.

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Stablecoin issuers

Frax Stablecoin

Legacy Frax Dollar (FRAX) is a U.S. dollar stablecoin issued by Frax Stablecoin.

FRAX has been issued on public blockchains since December 2020 and is native to 7 networks, including Ethereum, Avalanche, Fantom, Polygon, BNB Chain, and Arbitrum One.

Legacy Frax DollarFRAX

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