AMA With frax.finance || DEC-05–2020
Sam Kazemian- CEO-Frax Finance & WA @walidaly have taken AMA in Crypto Avengers TG Channel and helped to know about FRAX. you can check full session details below.
Crypto Avengers: we have a bunch of seasoned investors and techies and a lot of noobies here, I think it would also be great if your could just explain what is FRAX and what it intends to solve in layman's terms.
Sam(Frax): Yes sure Frax is the first fractional-algorithmic stable coin protocol. Frax is open-source, permission less, and entirely on-chain — currently implemented on Ethereum (with possible cross chain implementations in the future). The end goal of the Frax protocol is to provide a highly scalable, decentralized, algorithmic money in place of fixed-supply digital assets like BTC.
Frax is a new paradigm in stablecoin design. It brings together familiar concepts into a never before seen protocol:
Fractional-Algorithmic — Frax is the first and only stablecoin with parts of its supply backed by collateral and parts of the supply algorithmic. The ratio of collateralized and algorithmic depends on the market’s pricing of the FRAX stablecoin. If FRAX is trading at above $1, the protocol decreases the collateral ratio. If
FRAX is trading at under $1, the protocol increases the collateral ratio.
Decentralized & Governance-minimized — Community governed and emphasizing a highly autonomous, algorithmic approach with no active management.
Fully on-chain oracles — Frax v1 uses Uniswap (ETH, USDT, USDC time-weighted average prices) and Chainlink (USD price) oracles.
Two Tokens — FRAX is the stablecoin targeting a tight band around $1/coin. Frax Shares (FXS) is the governance token which accrues fees, seigniorage revenue, and excess collateral value.
Crypto Avengers: can you talk about team behind FRAX ? how many developers you have ?
Sam(Frax): 3 developers right now and 3 non developers. The project is early but we are building very fast and we want to grow the team quickly as the community grows on launch
Crypto Avengers: we have been hearing about FRAX since a few months, What’s the current status of the project ?
Sam(Frax): There is a testnet live at app.frax.finance that anyone can try and find bugs, if there are critical vulns, we will award real mainnet FXS. Our code is entirely finished and we are reviewing/preparing for launch. We plan to launch soon this month but an exact date hasn’t been announced. We will give 2–3 days heads up before starting any kind of farming.
Crypto Avengers: What do you think the are the Strengths and Weakness of Protocol?
Sam(Frax): I think in the beginning when FRAX is more collateralized, it is a bit boring because it’s a stablecoin backed by other stablecoins. But as FRAX becomes more algorithmic it becomes very exciting. Next year, in 2021 we are also going to release a Frax Bond token that helps with algorithmic stability as well.
Crypto Avengers: is Stephen moore still with you ? 🙂
Sam(Frax): Yes he is an advisors in the economic side helping with monetary theory :), Especially for releasing frax bonds next year.
Crypto Avengers: Is there any impact of Stablecoin Tethering and Bank Licensing Enforcement(STABLE) coin Act on $FRAX which is being put forth by Lawmakers in US ?
Sam(Frax): No actually I believe that law is more bullish for FRAX because it only targets stablecoins that have USD reserves inside of banks, which FRAX does not. FRAX is a fully decentralized and onchain protocol meaning that there is no entity that needs to get a banking license. We do not control or own any FRAX code, we just own tokens as the team.
Crypto Avengers: FRAX act as Stablecoin, so how you keep the stability against the volatile of the market?
Sam(Frax): We’re the first stablecoin to create the fractional-algorithmic stability mechanism meaning that part of FRAX’s supply is backed by collateral (other stablecoins) and other parts are backed by nothing (algorithmic). How much each ratio is depends on the price of FRAX. You can check out docs.frax.finance if you want to know the technical way in which it works.
Crypto Avengers: What’s the uniqueness of your project that can not be found in other project that’s been released so far? And how the demand of the token will increase in the future? or what steps would you take to
increase the demand?
Sam(Frax): I think the most interesting thing about Frax is the unique fractional algorithmic stability mechanism for a stablecoin. No other project has created such a mechanism.
Crypto Avengers:
whats the best way to get FXS using my budget? Lets say I have $10k usd I want to use it best way.
Sam(Frax): I think the best way on launch might be to mint FRAX with $10k of stablecoins since it is 100% collateralized at launch. Then put the FRAX in the FRAX-USDC pool to earn FXS farming rewards. Since FRAX is a stablecoin and USDC is a stablecoin, there is almost no impermanent loss and you get FXS for providing liquidity without needing to buy it
Crypto Avengers: when can we get tokenomics information and listing informaiton ?
Sam(Frax): All token info will always be posted to this link https://docs.frax.finance/token-distribution/frax-share-fxs-distribution
Crypto Avengers: Where did you get the inspiration for this unique project idea? And what influence will we have on the crypto industry due to the project?
Sam(Frax): I think the fractional algorithmic mechanism will inspire a lot of stability projects. In fact, it has already inspired inchi.farm
Crypto Avengers: Where did you get the inspiration for this unique project idea? And what influence will we have on the crypto industry due to the project?
WA(Frax): Back when Tether LLC did not have more than 75% of immediate reserves for USDT in circulation. However, since the price of Tether didn’t drop below $1, we thought that was interesting since it was public knowledge that Tether wasn’t fully backed (at the time, I believe now it is in 2020). So we got the idea to combine algorithmic principles from the seigniorage shares designs with a collateralized component all on-chain, then have the protocol test different ratios to see what the market believes about different collateral ratios.
FRAX uses hybrid approach (collateral & Algorithmic) to provide stability to its stablecoin FRAX , this idea has not been used before and we believe it will have a great impact on crypto industry and how it sees algo coins as not stable and have no true peg.
Crypto Avengers: The prosperity of the DeFi market this year is based on the underlying infrastructure and the improvement of AMM. In your opinion, has the prosperity of DeFi come to an end? To Uniswap and the DeFi market for such projects, where will the next burst point be?
WA(Frax): We believe that DEFI is here to stay, there will be bumps on the way but DEFI will solve many problems that our global economy is facing today.
Crypto Avengers: For a project development first of all main priority is having enough fund. Does FRAX team financially capable to run this project? Do you have enough fund for it’s development Can you tell us that how project generate the profit?
WA(Frax):
The funds from our private sale are enough, and will be going toward building out v1 successfully, then beginning work on v2 as soon as mainnet is successfully launched.
Crypto Avengers: Defi is the trending, Yield farming is the top traffic, Decentralized Finance is the future so FRAX is confident enough to lead to fulfill its goals and mission?
WA(Frax): Yes, We believe FRAX Finance will take the biggest share of the Pie, our liquidity programs will attract liquidity from the whole market, also we have many plans to list our stablecoin FRAX on several loan Platforms and exchanges.
Crypto Avengers: Does FRAX have Competitors in Crypto Space? What are the special advantages of FRAX with Competitor? Also What consensus algorithm is FRAX currently using?
Sam(Frax): FRAX is a Proof of Stake (PoS) , We believe that Algocoins should not be tribal or competing each other, the bigger the share algocoins take from the market the better for all Algocoins.
Crypto Avengers: Over the past months we have seen many yield farming projects that are just clones or copies with a few changes to Yam or sushiswap. What is your plan to attract liquidity from the mainstream yield farms that have launched to date?
WA(Frax): Our farming Programs will be very attractive to liquidity, we have put 60% of FXS supply for farming rewards , FXS emission rate in the first year will start at 12 million and it will increase in rate toward 36 million as the collateral ratio approaches 0% , The initial distribution of FXS is front-loaded to give early adopters a great opportunity to farm and accumulate (kind of like early BTC mining).
Crypto Avengers: Thanks for your time SAM !! and all the best for the mainnet launch and listing Please invite people where to go for further questions.
SAM(Frax): Thanks! Please join our telegram @fraxfinance or our twitter.com/fraxfinance
We appreciate SAM & WA for spending time on our community questions and teach about FRAX!!
More information:
Crypto Avengers TG Discussion Channel: https://t.me/CryptoAvengers4
Crypto Avengers TG Announcement Channel: https://t.me/CryptoAvengers1
⭐️frax.finance Social Links:
Website: frax.finance
Twitter:https://twitter.com/fraxfinance
Telegram Channel: https://t.me/fraxfinance
GitHub: https://github.com/FraxFinance
