[Crypto projects](https://revain.org/projects/) › Frax Finance

# Frax Finance (FRAX): how it works, supply and reviews

## In short

- **Type**: Stablecoin issuer and DeFi protocol suite (Fraxswap, Fraxlend, BAMM, AMOs) with its own chain, Fraxtal
- **Maximum supply**: FRAX supply is permanently capped at 143 million under FIP-441 (approved on Snapshot)
- **Risks and caveats**: frxUSD redemption depends on custodian contracts holding reserves; redemption into a particular reserve asset is not guaranteed
- **Checked**: 31 October 2026

## Key facts

- **Ticker**: FRAX
- **Official site**: [frax.com](https://frax.com/)

Key facts checked on 31 October 2026 against official sources.

## What is Frax Finance

Frax Finance is a DeFi ecosystem that issues stablecoins, chiefly frxUSD, a fully collateralised US dollar stablecoin backed by tokenised US Treasury funds, plus frxETH and FPI. It also runs Fraxtal, its own chain, and lending and AMM subprotocols. FRAX (formerly FXS) is the ecosystem's supply-capped token, used as Fraxtal gas and, when locked as veFRAX, for governance.

## Network and consensus

| Parameter | Details |
|---|---|
| Type | Stablecoin issuer and DeFi protocol suite (Fraxswap, Fraxlend, BAMM, AMOs) with its own chain, Fraxtal |
| Stablecoin backing | frxUSD is fiat-redeemable and backed 1:1 by cash-equivalent reserves such as tokenised US Treasury funds held with regulated custodians |
| Runs on | frxUSD is live on more than 20 blockchain networks |
| Gas token | FRAX is the native gas token of Fraxtal since the North Star hardfork |

## Supply and issuance

| Parameter | Details |
|---|---|
| Maximum supply | FRAX supply is permanently capped at 143 million under FIP-441 (approved on Snapshot) |
| Issuance | Annual emission budgets act as spending caps, falling from 4 million FRAX (April 2025 to March 2026) to 2 million in the year to March 2032 |
| Inflation | The planned perpetual 3% tail emission was eliminated by FIP-441 |
| Fee burn | The Frax Burn Engine permanently burns FRAX from sources such as the Fraxtal EIP-1559 base fee |

## What FRAX is used for

- Gas token of the Fraxtal blockchain
- Locked as veFRAX (1 week to 4 years) for voting in Frax governance and farming boosts
- veFRAX receives up to 10% of eligible net protocol revenue, reviewed every six months

## Who develops and governs Frax Finance

- **Governance**: Frax DAO: proposals (FIPs) are discussed on gov.frax.finance and voted on Snapshot; governance is moving to veFRAX on Fraxtal
- **Company**: Frax Inc, a public-benefit corporation, manages frxUSD compliance and collateral under delegation from the Frax DAO (FIP-432)
- **Legal entity**: Protocol IP for Fraxlend, Fraxswap and Fraxtal belongs to the Frax DAO; frxUSD rights are licensed exclusively to Frax Inc
- **Developer**: On-chain subprotocols are managed by the Frax Core Team on behalf of the DAO

## History

| Date | Event |
|---|---|
| 20 December 2020 | Frax launched with the original fractional-algorithmic FRAX stablecoin |
| — | FIP-428 (North Star) passed: FXS renamed FRAX, veFXS renamed veFRAX, and the original FRAX stablecoin renamed Legacy Frax Dollar |
| 28 April 2025 | FXS holders could upgrade 1:1 to FRAX, the Fraxtal native gas token |
| — | FIP-441 passed, fixing FRAX supply at 143 million and unifying governance on Fraxtal |

## Security and audits

- Published audits include Trail of Bits (June 2021 to January 2024), Code4rena (September 2022, frxETH), Certora (October 2024, BAMM), Zellic (July 2025 frxUSD contracts; October 2026 USD stablecoin), ChainSecurity (July 2025) and Codespect (October 2026)
- Bug bounty: the lower of 10% of the exploit or $10 million, paid in frxUSD and FRAX, for smart contract code only
- No exploit post-mortem was found on the Frax pages reviewed

## Security incidents

| Date | What happened | Source |
|---|---|---|
| 31 October 2023 | Hack: Frax asked users not to use its frax.finance and frax.com domains until further notice and asked for contacts at its registrar Name.com; co-founder Sam Kazemian said not to use the site until the team could get the domain back. Funds returned: not stated | [x.com](https://x.com/fraxfinance/status/1719497560543658073) |

## Official FRAX contracts

| Network | Contract address |
|---|---|
| Ethereum | [0x3432b6a60d23ca0dfca7761b7ab56459d9c964d0](https://etherscan.io/token/0x3432b6a60d23ca0dfca7761b7ab56459d9c964d0) |
| Fraxtal (WFRAX) | [0xfc00000000000000000000000000000000000002](https://fraxscan.com/token/0xfc00000000000000000000000000000000000002) |

FXS/FRAX ERC-20 on Ethereum (upgradeable 1:1 to native FRAX on Fraxtal) and the wrapped WFRAX on Fraxtal, as linked in the Frax docs.

## Risks and caveats

- frxUSD redemption depends on custodian contracts holding reserves; redemption into a particular reserve asset is not guaranteed
- frxUSD issuance and compliance are delegated to Frax Inc under an exclusive licence that DAO governance cannot revoke at will
- The legacy FRAX stablecoin (LFRAX) is being wound down over time, and the bug bounty excludes front-end and admin-key issues

## Official links

- Website: [frax.com](https://frax.com/)
- Docs: [docs.frax.com](https://docs.frax.com/)
- Legacy docs: [docs.frax.finance](https://docs.frax.finance/)
- Source code: [github.com/FraxFinance](https://github.com/FraxFinance)
- Blog: [fraxfinancecommunity.medium.com](https://fraxfinancecommunity.medium.com/)
- Governance forum: [gov.frax.finance](https://gov.frax.finance/)
- Block explorer: [fraxscan.com](https://fraxscan.com/)

## Questions and answers

**What is Frax Finance?**

A DeFi ecosystem that issues the frxUSD stablecoin (backed by tokenised US Treasury funds), frxETH and FPI, and runs the Fraxtal chain and lending and AMM protocols.

**Is FXS now FRAX?**

Yes. Under FIP-428 FXS was renamed FRAX, and since 28 April 2025 FXS can be upgraded 1:1 to FRAX on Fraxtal. The original FRAX stablecoin was renamed Legacy Frax Dollar (LFRAX).

**What is the maximum supply of FRAX?**

143 million FRAX, a permanent cap set by FIP-441, with annual emission budgets acting as spending limits.

**What backs frxUSD?**

Cash-equivalent reserves such as tokenised US Treasury funds held with regulated custodians, managed by Frax Inc under DAO delegation.

**Is Frax audited?**

Yes. Frax lists audits by Trail of Bits, Code4rena, Certora, Zellic, ChainSecurity and others from 2020 to October 2026.

## Sources

- [Frax docs - Protocol overview](https://docs.frax.com/protocol)
- [Frax docs - FRAX token](https://docs.frax.com/protocol/frax/overview)
- [Frax docs - veFRAX](https://docs.frax.com/protocol/frax/vefrax)
- [Frax docs - Frax USD stablecoin](https://docs.frax.com/protocol/assets/frxusd/frxusd)
- [Frax docs - What is frxUSD](https://docs.frax.com/frxusd)
- [Frax docs - Audits](https://docs.frax.com/protocol/security/audit)
- [Frax docs - Bug bounty](https://docs.frax.com/protocol/security/bugbounty)
- [Frax docs - Links](https://docs.frax.com/protocol/integration/links)
- [Frax legacy docs - Original design](https://docs.frax.finance/frax-v1-original/original-design)
- [Frax governance - FIP-428 North Star v2](https://gov.frax.finance/t/fip-428-frax-north-star-proposal-v2/3652)
- [Frax governance - FIP-441](https://gov.frax.finance/t/fip-441-frax-1-token-1-mission-1-vision/3826)
- [Frax Snapshot space (frax.eth)](https://snapshot.org/#/frax.eth)

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Page updated: 2026-10-31

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Source: https://revain.org/projects/frax/