### What is Frax?

Frax is a decentralised finance (DeFi) protocol that offers a suite of stablecoins and collateral derivatives, primarily designed to provide liquidity, yield earning, and pledging within the DeFi ecosystem. The protocol features three primary stablecoins: FRAX pegged to USD, FPI pegged to a basket of consumer goods, and frxETH, a Liquid Staking Derivative pegged to ETH.

### How does Frax work?

Frax operates on a fractional-algorithmic stablecoin system combining both collateralised and algorithmic mechanisms to maintain price stability. Built on the Ethereum network, Frax leverages Algorithmic Market Operations (AMOs) and smart contracts. It employs a dual-token model with FRAX as the stablecoin and FXS as the governance token, which accrues fees and participates in the protocol's decision-making processes.

### What are the potential use cases for Frax?

Potential use cases for Frax include:

- Decentralised lending and borrowing through platforms like Fraxlend.
- Stablecoin issuance and management.
- Automated market making and liquidity provision via Fraxswap.
- Cross-chain communication and DeFi infrastructure improvements.

### What is the history of Frax?

Frax was founded by Sam Kazemian and his team amid the 2019 crypto bear market with a focus on developing a new class of stablecoins. Despite scepticism post the 2018 ICO bubble, the project's initial progress involved significant theoretical and technical development without external funding. The protocol has since evolved, implementing features like Fraxtal, a Layer 2 chain, and partnering with protocols for cross-chain communication enhancements. Over the years, Frax has grown in market presence, asserting itself as a significant player in the stablecoin sector.

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