Frax Share, known by its ticker FXS, is an integral part of the Frax Finance protocol. But what exactly is it and what purpose does it serve? In this in-depth exploration, we’ll answer all your questions about the FXS coin, including how it works, its value proposition, price predictions, and more.
What is the purpose of Frax Share (FXS) coin?
The primary purpose of the FXS coin is to help maintain the stability of the Frax stablecoin (FRAX). FRAX aims to keep a price peg of $1 USD, but this requires support mechanisms. FXS tokens are used as collateral to back FRAX – when FRAX rises above $1, more FXS is locked up as collateral and minted. Likewise, when FRAX falls below $1, locked FXS is released.
In addition to providing collateral, FXS is the governance token for Frax Finance. As the native cryptocurrency of the protocol, FXS holders can participate in voting on protocol upgrades and parameters. This gives the community influence over the future of the project.
How does Frax Share (FXS) crypto work?
When FRAX is trading above $1, arbitrage bots can mint new FRAX by locking collateral including a portion of burned FXS tokens. This increases the supply of FRAX and pushes the price back down. Conversely, if FRAX falls below $1, arbitrage bots can redeem FRAX for the collateral including minted FXS, decreasing FRAX supply and propping up the price.
The amount of FXS burned or minted during these processes depends on the collateral ratio. For example, at a 98% ratio, minting 1 FRAX would require burning $0.02 worth of FXS along with $0.98 of collateral. This dynamic system helps keep FRAX pegged to the dollar without relying solely on centralized control.
Does Frax Share (FXS) token have a future?
With its core role supporting the stability of the Frax protocol, FXS appears poised for ongoing usefulness. The developers recently announced plans to launch their own Layer 2 scaling solution called FraxChain by the end of 2023. This will enable faster and cheaper transactions, benefiting both FRAX and FXS.
Price prediction sites have generally optimistic outlooks on FXS, with targets ranging from $12-20 by the end of 2023 up to $50-100 levels by 2030. Additionally, as the only way for community members to participate in governance, FXS ensures decentralization and longevity for Frax Finance. So while no investment is guaranteed, FXS shows potential for long term viability.
When Frax Share (FXS) coin launched?
The FXS token entered circulation in late 2020 alongside the initial launch of the Frax protocol. On December 27th, 2020 it began trading on Uniswap with an initial price around $3.90. The community and development team have steadily expanded the project since, introducing upgrades like time-locked staking for veFXS and plans for their own Layer 2 network.
FXS has been around for a few years now, finding ways to innovate and give more utility to token holders as cryptocurrency technologies continue advancing at a rapid pace. With big changes on the horizon, the coin’s formative years now seem to be setting the stage for longer term growth.
Is Frax Share (FXS) crypto a scam?
There is no credible evidence that Frax Share itself is a scam. The protocol and community have developed extensively in a transparent manner since launching in late 2020.
Frax Finance publishes technical documentation openly on their website about how FXS and the stablecoin FRAX work. Additionally, the team’s backgrounds and GitHub code are verifiable. Major exchanges also list FXS, which would be unlikely if it posed legal or technical risks.
Of course, cryptocurrency investing inherently carries risks. But for an algorithmic stablecoin protocol, Frax has established itself as a legitimate project pursuing technological progress rather than a quick money scheme. With upgrades continually proposed via on-chain governance, FXS seems committed to real utility rather than an empty promise.
Is it safe to invest in Frax Share (FXS) token?
As with any cryptocurrency, there are no guarantees when investing in FXS. However, several factors suggest it carries lesser risks than many alternative coins:
- Frax Finance is an established project with a record of steady development since 2020.
- FXS plays a necessary support role for the price-stable FRAX, giving it intrinsic value and usage.
- Major upgrades like their upcoming Layer 2 solution show the team is dedicated to progress.
- Price predictions tend to be optimistic based on fundamentals like token supply and demand.
Naturally, market volatility could still impact the FXS price in either direction. But compared to speculative moonshots, FXS appears to have clearer use cases and safer prospects making it a reasonably sound cryptocurrency to consider for investment or holding purposes. Just don’t risk more than you can afford to lose.
Is Frax Share (FXS) coin worth it? FXS Price 2023
Based on fundamentals and price analysis, FXS does appear worthwhile for 2023 and beyond. Leading prediction sites have an average estimate of $10-12 for the FXS price by end of this year as the market hopefully continues recovering. Factors like the Layer 2 solution rollout could also boost interest.
Looking further out, targets of $15-20 for 2025 and $50-100 by 2030 show analyst confidence that FXS has legs as a long-term hold. Its core role supporting Frax stability gives it an advantage over many other coins lacking clear utilities. For a mid-sized crypto with promising tech updates ahead, FXS seems a reasonably solid investment choice. Of course, always do your research as well before buying any tokens.
Where to buy Frax Share (FXS) crypto?
The most convenient and trusted places to purchase FXS are top centralized exchanges where it holds listings. Some good options include:
Binance – The largest crypto exchange offers deep liquidity for FXS trading.
OKX – Another major platform excellent for accessing altcoins like FXS.
Gate.io – Known for supporting smaller market cap coins, they list FXS.
KuCoin – An easy to use exchange that reliably supports promising projects.
You can deposit fiat or other cryptos, then trade for FXS pairs like FXS/USDT. Be sure to store tokens in a secure personal wallet once bought. Also, by following crypto news sites like EXEcrypto, you can stay on top of any new listings.
How to sell Frax Share (FXS) token?
Should you eventually want to sell your FXS holdings, the process mirrors how you purchased them:
- Transfer your FXS from your personal wallet back to the exchange where you bought it.
- Choose FXS from your balances and select the “Sell” option.
- Pick which token you want to trade it into like USDT, deposit it into your exchange account.
- Complete the market order and your FXS will be sold at the best available price.
- Withdraw your funds or trade them into other opportunities.
Be aware of trading fees, do your homework, and only trade what you’re willing to part with long term for your financial goals. Taking profits is just as important as doing research!
How to stake Frax Share (FXS) coin?
FXS holders can generate additional yields by staking their tokens. This helps support network security while earning you more coins. Currently the best staking option for FXS involves using the veFXS contract:
- Deposit your FXS into the veFXS staking contract on the Frax site.
- Your tokens will be time-locked for a period, after which you can withdraw initial capital plus yields accrued.
- veFXS stakes currently pay around 6-8% APY, paid in more FXS tokens.
- Leave staked and continue accumulating, compounding your long term holdings.
Staking is low effort once set up. Just be aware of any lockup times and conditions before delegating your investments.
How to mine Frax Share (FXS) crypto?
FXS and other Ethereum-based coins are not mineable through traditional mining means like Bitcoin. The network validators who process transactions are awarded through staking or “proof of stake”, not energy-intensive mining operations.
As such, the only way for regular users to earn FXS is by purchasing it on exchanges, staking through protocols like veFXS, or participating in project development/governance incentives if qualified. There is no way to directly “mine” new FXS tokens through specialized hardware or computational power. Staking remains the recommended approach for passive FXS income.
While cryptocurrencies can be complicated – Frax Finance and its FXS token are working to make decentralized stablecoins and their governance more accessible through constant innovation. With big plans ahead, FXS appears poised for an interesting 2023 and beyond. Just be sure to always do your research before investing.