sfrxUSD, issued by the Frax Protocol smart contracts under onchain frxGov governance with compliance and collateral management assigned to Financial Reserves and Asset Exploration Inc, is a tokenized yield vault accruing returns on staked frxUSD [S1].

sfrxUSD is the yield-bearing staked form of frxUSD, structured as an ERC-4626 vault whose exchange rate against frxUSD increases as yield accrues [S2]. Yield is generated from idle frxUSD earning the Federal Reserve Interest on Reserve Balances and U.S. Treasury bill yield, lending allocations across Fraxlend, Resupply, Aave and Morpho, and carry trades using Ethena USDe and Superstate USCC, with dynamic reallocation across these strategies [S2].

Frax operates two independent monetary systems with distinct portfolios and liabilities; sfrxUSD operates on a fully separate balance sheet isolated from both Legacy FRAX and frxUSD reserves [S2]. The underlying frxUSD is fiat-redeemable and backed 1:1 by cash-equivalent reserves, predominantly tokenized U.S. Treasury fund instruments held by governance-approved enshrined custodians [S3]. Under governance proposal FIP-432, Financial Reserves and Asset Exploration Inc, a public benefit corporation referred to as FRAX Inc, holds reserves in segregated brokerage accounts and does not rehypothecate, leverage, or pledge them [S1]. sfrxUSD is conditionally redeemable and not fully redeemable at all times [S2].

sfrxUSD follows the ERC-4626 vault standard [S2], while frxUSD is natively supported on Ethereum and Fraxtal and represented as a LayerZero Omnichain Fungible Token on chains including Solana, Linea and Sonic [S3]. frxUSD is minted when a custodian deposits provable cash-equivalent reserves into a frxUSDCustodian contract and burned on redemption, settling intra-business-day or next business day [S3].

<Sources
  retrievedAt="2026-06-21"
  items={[
    { id: "S1", url: "https://gov.frax.finance/t/fip-432-transfer-of-compliance-collateral-management-of-frxusd-to-frax-inc/3748" },
    { id: "S2", url: "https://gov.frax.finance/t/fip-430-preparation-for-frxusd-payment-stablecoin-charter-compliance/3698" },
    { id: "S3", url: "https://docs.frax.finance/?ask=What%20is%20frxUSD%20and%20enshrined%20custodians" },
  ]}
/>


Tokenized funds

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

Staked Frax USD (sfrxUSD) is a tokenized fund share issued by Frax Stablecoin.

The fund is open-ended and invests in multi-asset.

Retail investors can subscribe and redeem in frxUSD, and holders have a right to redeem at net asset value.

sfrxUSD has been issued on public blockchains since March 2024 and is native to Fraxtal and Ethereum, with bridged versions on four more.

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