The FRAX stablecoin is issued by the decentralized lending platform Frax Finance. Fractional collateral reserves are used by Frax Finance's algorithm to maintain the value of FRAX. On Frax Finance, the accepted collateral (such as stablecoins) and the governance token (FXS) are both used as collateral. Based on its pricing, the collateralization ratio for FRAX fluctuates. FXS is an Ethereum network-based ERC-20 token. Its main applications are liquidity incentives, minting, staking, and redeeming FRAX, as well as governance. FXS can be locked in vote-escrowed FXS ("veFXS"), where the voting power increases the longer a token is locked, to take part in the governance of Frax Finance.
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