Frax Finance, explained from the ground up
Frax is one of the longest-running stablecoin projects in DeFi. This is a plain-English knowledge base for it: what the stablecoins are, how the peg holds, what changed in the 2025 rebrand, and how the lending, staking and Fraxtal pieces fit together.
Frax Finance launched in December 2020 as the first fractional-algorithmic stablecoin and has grown into a full-stack ecosystem: dollar stablecoins, an Ethereum liquid-staking system, a lending market, a native AMM, and its own layer-2 network, Fraxtal. In 2023 the community retired the algorithmic backing and moved its main stablecoin to full collateral. In 2025 it began the largest rebrand in its history, the "North Star" plan, which reshuffles the token names.
Reading this in 2026? Names matter here
The North Star rebrand renames the FXS governance token to FRAX, and rebrands the original FRAX stablecoin to frxUSD. Rollout is staged, so the live state can differ from any single article. Where it counts, we flag it and point you to the official docs.
Find your starting point
Each page below stands on its own, and they all link back here. Pick the one that matches what you need.
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Basics
What is Frax Finance?
The short history, what problem it set out to solve, and what the project looks like today.
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Mechanics
How it works
Collateral, redemptions, the peg, and the AMOs that put reserves to work.
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Tokens
The token map
FXS becoming FRAX, frxUSD, sFRAX, FPI and FXB bonds — which token does what.
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Guide
Depositor guide
How sFRAX savings and frxETH staking actually earn, and what the yield depends on.
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Guide
Borrower guide
Borrowing on Fraxlend: isolated pairs, loan-to-value, and keeping a position healthy.
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Governance
Staking & governance
Locking for veFXS/veFRAX voting power and how proposals move from forum to chain.
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Risk
Risks & liquidations
An honest list of what can go wrong, from de-pegs to liquidations to bridge risk.
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Reference
Supported assets
Every token in the ecosystem and the collateral that stands behind the stablecoins.
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Security
Security & audits
Who has reviewed the code, plus anti-phishing habits worth building.
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Network
The ecosystem
Fraxtal, Fraxswap, BAMM, Fraxlend and Fraxferry, and how they connect.
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Reference
Glossary
Every acronym from AMO to veFXS, defined in one sentence each.
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Answers
FAQ
Is FRAX still algorithmic? Did FXS become FRAX? Straight answers.
The ecosystem in one picture
A note on numbers
Prices, total value locked, yields and the exact collateral ratio move constantly. We avoid quoting stale figures as if they were fixed. Where a number genuinely matters, we mark it as a live figure and send you to a source that updates in real time, such as the official documentation or a public dashboard. Treat everything here as education, not financial advice.