In this week’s episode, we talk about FRAX, a fractional algorithmic stablecoin. Using the token economics framework that we have explained in other videos, we will analyse the token economics of the $FRAX stablecoin, perform stability analysis on it, and give some opinions about FRAX.
0:00 – Introduction & Contents
0:36 – What is Frax?
2:38 – Dual-Token Mechanism explained
3:34 – Reserve Mechanism explained
4:36 – How to create $FRAX stablecoin
7:11 – How to Maintain Stability
11:10 – Stability Analysis of FRAX
16:32 – Opinion: Elasticity in Collateral
17:15 – Opinion: backing by USDC