Question 1

What is Frax USD (frxUSD)?

Accepted Answer

Frax USD (frxUSD) is a fiat-redeemable, fully-collateralised USD stablecoin issued by the Frax Finance protocol. It is designed with a hybrid architecture that combines (a) real-world “enshrined custodians” that hold cash-equivalent reserves and can mint/burn frxUSD 1:1, and (b) on-chain mechanisms maintained by the protocol. The custodian layer is governed on-chain and instantiated via dedicated `frxUSDCustodian` smart contracts, each with its own minting cap and reserve asset (for example, tokenised liquidity fund units). Any user can interact with these contracts, while access to the underlying reserve instruments may be subject to the custodian’s requirements. frxUSD is redeemable against any custodian contract that has collateral available, without a guarantee that a specific custodian or asset will always be available.

Question 2

What is Frax USD (frxUSD) used for?

Accepted Answer

- Settlement and payments: on-chain USD unit for transfers and commerce within the Frax ecosystem and externally.  
- DeFi integrations: collateral and quote asset across Frax sub-protocols (e.g., Fraxlend, Curve/AMO venues) and third-party platforms, subject to each venue’s risk controls.  
- Upgrade target for legacy stablecoins in the Frax stack: the protocol provides a path for holders of prior Frax stablecoin contracts to upgrade into frxUSD.

Question 3

Who created Frax USD (frxUSD)?

Accepted Answer

frxUSD is developed by the Frax Finance core team and governed through the Frax community’s proposal process. The launch and upgrade pathway were specified in a governance proposal that introduced frxUSD (and its staked variant) and defined custodian onboarding and migration mechanics.

Question 4

Technical architecture

Accepted Answer

**Enshrined custodians & redemption model**  
Each custodian onboarded by governance receives an `frxUSDCustodian` contract with a mint cap and a specified reserve asset. Examples listed in the protocol documentation include tokenised U.S. Treasury fund products and stablecoin rails; additional custodians can be added by governance. Redemptions occur 1:1 for the collateral held by a custodian contract that has available balances.

**On-chain issuance and controls**  
The hybrid design embeds protocol-level mint/redeem logic alongside custodian contracts, allowing permissionless interaction with the frxUSD token while keeping the real-world issuance/redeem rights anchored to audited reserve instruments and governance-set limits.

**Reserve partners and transparency**  
Protocol materials describe partnerships with tokenised U.S. Treasury fund providers, enabling on-chain visibility of reserve instruments and associated reporting.

Question 5

Staked Frax USD (sfrxUSD)

Accepted Answer

sfrxUSD is the yield-accruing ERC-4626 vault for frxUSD. It is fully redeemable for frxUSD at a vault exchange rate that increases as yield is earned. The vault allocates frxUSD across a governance-approved “Benchmark Yield Strategy” that can rotate among: (i) carry-trade venues, (ii) DeFi AMO strategies, and (iii) short-dated U.S. Treasury bill exposures (IORB/T-Bill). Allocation adjusts to prevailing conditions under the approved framework.

Question 6

Migration & renaming (2024–2025)

Accepted Answer

- Legacy stablecoin upgrade path: the original Frax stablecoin contracts remain functional and can be upgraded 1:1 to frxUSD (and sFRAX to sfrxUSD) via protocol-supplied contracts. On some networks the upgrade is automatic; on others it is available on demand.  
- Ticker realignments in the Frax stack: the governance/utility token **Frax Share (FXS)** was renamed **FRAX** and now functions as the Fraxtal network’s commodity/gas token following the North Star upgrade. Documentation notes that FRAX serves as the native gas asset on Fraxtal, with veFXS renamed to veFRAX. These changes are independent of frxUSD but affect naming observed across venues.

Question 7

Implementation notes for integrators

Accepted Answer

- Custodian awareness: integrators should treat frxUSD redemption as fungible across custodian contracts that currently hold collateral; no single custodian is guaranteed at all times.  
- sfrxUSD behaviour: as a non-rebasing ERC-4626 vault, accounting is handled via shares and an increasing exchange rate; redemptions return frxUSD. Strategy rotation follows governance-approved venues.  
- Ecosystem coexistence: legacy FRAX/sFRAX contracts continue to operate and upgrade paths remain open, supporting backward compatibility during venue migrations.


frxUSD	ERC20	ETH	0xcacd6fd266af91b8aed52accc382b4e165586e29	2025-01-03
frxUSD		FRAX	0xfc00000000000000000000000000000000000001	2026-11-05