FRAX/Legacy Frax Dollar (prev. Frax Share (FXS)) is the native gas and commodity asset of the Fraxtal blockchain. Introduced through the North Star Hard Fork, it functions as the sole monetary unit of the Fraxtal ecosystem and is intended to secure the network through future validator staking mechanisms. ^[2]

Overview

Unlike governance tokens, Frax is not used to vote on protocol decisions. However, external protocols may integrate Frax as a component for governance or staking mechanisms. Its primary role remains that of base money within the Fraxtal network. The FRAX token is designed to capture value and appreciate over time through protocol revenue and deflationary mechanisms.

The Frax Finance protocol has evolved significantly since its inception, expanding from a single stablecoin to a comprehensive DeFi ecosystem with multiple products including lending, AMM (Automated Market Maker), and yield-generating solutions. The token's economic design incorporates deflationary mechanisms intended to benefit long-term holders while aligning incentives across the ecosystem.

Ecosystem and Partnerships

Binance Integration

On January 15, 2026, Frax announced the full integration of its Fraxtal network with the Binance cryptocurrency exchange. The partnership included Binance adding support for Fraxtal network deposits and withdrawals, as well as listing the new FRAX ecosystem token. As part of the integration, Binance also managed the platform-side upgrade of existing Frax Shares (FXS) positions to the new FRAX token. The collaboration was described as a significant move to make the Frax stack, including frxUSD and Fraxtal, more accessible to a global user base and was called a "vote of confidence in Frax’s long-term trajectory." ^[6]

ATW Partners $50 Million Investment

In a move to bridge traditional and decentralized finance, Frax announced on January 14, 2026, that New York-based investment firm ATW Partners agreed to invest up to $50 million in the frxUSD stablecoin. The initiative includes qualified custody services for the frxUSD provided by BitGo Bank & Trust, ensuring institutional-grade security. At the time of the announcement, frxUSD reserves were noted as being fully backed by tokenized U.S. Treasury exposure. ^[7]

Rebranding and Token Swap

In late 2025, plans were announced for the rebranding of the Frax Share (FXS) token to Frax (FRAX), with a 1:1 token swap ratio. Following the announcement, various cryptocurrency exchanges detailed their support for the migration.

As an example of the transition, the Bybit exchange announced its support on December 30, 2025. It confirmed an automatic conversion of all user balances from FXS to the new FRAX token. The process on the exchange occurred in January 2026, with a specific timeline for suspending old FXS services and launching the new FRAX token. On January 6, 2026, deposits, withdrawals, and trading for FXS were halted. Subsequently, on January 12, 2026, deposits, withdrawals, and trading for the new FRAX token commenced. ^[4]​

Binance also announced its support for the event, ceasing support for FXS deposits and withdrawals on December 27, 2025. The exchange stated that trading for the new FRAX token would begin at a later date. ^[5]

veFRAX System

veFRAX represents locked FRAX (Prev. FXS) and is used to participate in governance across Frax protocols.

• Lock Mechanism: Users can lock their FRAX tokens for periods ranging from 1 week to 4 years
• Time-Weighted Voting: Longer lock periods result in greater voting power, with 4-year locks providing maximum voting weight
• Decay Function: Voting power gradually decreases as the lock period approaches expiration
• Non-Transferable: veFRAX positions cannot be transferred or sold, encouraging genuine long-term participation ^[3]

Token Utility

FRAX serves multiple functions within the Frax Finance ecosystem:

• Value Accrual: The token captures value from protocol revenue streams across various Frax products
• Yield Boosting: veFRAX holders receive boosted yields on their farming positions in Frax-related liquidity pools
• Protocol Incentives: The token is used to incentivize liquidity provision and other beneficial behaviors within the ecosystem The governance utility of FRAX is implemented through the vote-escrowed model (veFRAX), which rewards long-term holders with greater voting power and additional benefits proportional to their lock duration.

Tokenomics

FRAX has several distinctive tokenomic features designed to create sustainable value for holders:

• Deflationary Mechanism: A portion of protocol revenue is used to buy back and burn FRAX tokens, reducing the circulating supply over time ^[1]
• Fixed Supply: Unlike many DeFi tokens, FRAX has a capped maximum supply, making it resistant to inflationary pressures
• Revenue Distribution: Protocol fees from various Frax products are directed to FRAX holders through buybacks and other value-accrual mechanisms
• Liquidity Incentives: Strategic liquidity mining programs incentivize deep liquidity for FRAX pairs on major decentralized exchanges

The token's deflationary nature, combined with growing protocol revenue, creates a mechanism for potential value appreciation independent of market speculation.

Yield Opportunities

FRAX token holders can access various yield-generating opportunities within the ecosystem:

• veFRAX Staking: Locking FRAX as veFRAX provides a share of protocol revenue
• Liquidity Provision: Providing liquidity for FRAX pairs on decentralized exchanges earns trading fees and potential farming rewards
• Boosted Farming: veFRAX holders receive boosted yields when farming in Frax-related pools, with boost multipliers proportional to their veFRAX balance
• Fraxlend: FRAX can be used as collateral in the protocol's lending platform

The yield opportunities are designed to reward long-term holders and active participants in the ecosystem, creating multiple avenues for generating returns beyond simple price appreciation.

Integration with Frax Ecosystem

FRAX is deeply integrated with other components of the Frax ecosystem:

• veFRAX: The governance token works alongside the protocol's stablecoin
• Fraxlend: The lending platform that allows FRAX to be used as collateral
• Fraxswap: The protocol's AMM where FRAX pairs receive special treatment and reduced fees
• Fraxferry: The cross-chain bridge solution that enables FRAX mobility across different blockchains

These integrations create a synergistic relationship where the success of each product contributes to the overall value proposition of the FRAX token, creating a positive feedback loop for the ecosystem.