Decentralized finance protocol Frax Finance, known for issuing several decentralized stablecoins, has announced a major new milestone in its development. By the end of 2023, Frax Finance will launch Fraxchain, its own second layer solution of Ethereum.
Frax Finance announces its layer 2
The Decentralized Finance (DeFi) Protocol Ecosystem Frax Finance continues to expand and diversify. Following the success of its stablecoins, notably frxETH, the Frax team announced the launch of a second layer blockchain: Fraxchain.
Presumably, this Tier 2 solution will be geared towards the creation of a smart contract platform adapted to the new uses and needs of DeFi. Asked at the microphone of our colleagues from The Block, Sam Kazemian, founder of Frax, explained:
“Fraxchain essentially represents the culmination of the whole Frax ecosystem and all the traction and users that we have acquired. »
In effect, frxETH is the fastest growing stablecoin since launch. In the space of just eight months, it has grown from 0 to $393 million in market capitalization, thanks in particular to the Shanghai update of Ethereum and to the growing enthusiasm for liquidity staking solutions.
Currently, Frax Finance is one of the most comprehensive and innovative DeFi protocols. Three stablecoins are offered : FRAX (backed by the US dollar), FPI (backed by a basket of consumer goods, therefore linked to inflation) and frxETH (a liquidity staking token).
In addition, Frax offers Fraxswapan Automated Market Maker (AMM), Fraxlenda lending and borrowing platform and finally Fraxferrya bridge allowing to exchange the stablecoins of its ecosystem between several blockchains.
👉 To go further: What is a layer2, these second layer solutions of current blockchains?
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What do we know about Fraxchain?
Currently, we do not have many details about Fraxchain. In effect, the revelation was made as part of a podcast hosted by Flywheel DeFiduring which the founder of Frax Finance, Sam Kazemian, exclusively announced this new blockchain.
It would seem that Fraxchain is a hybrid Rollup solution, combining an Optimistic Rollup type architecture (used by Arbitrum or Optimism) with Zero-Knowledge Proof (ZKP). The token used as gas for transactions will be frxETHthis stablecoin backed by Ether (ETH).
The ambition is both to offer developers an easy-to-learn code environment and also the fluidity, security and decentralization that ZK Rollups offer for end users.
Moreover, it could be planned to implement a new mechanism rewarding even more strongly the holders of veFXS tokens. Similar to the famous EIP-1559, this would burn transaction fees in order to redistribute them to holders of the veFXS token.
Finally, Fraxchain will integrate decentralized sequencers. These are specialized nodes responsible for aggregating transactions into batches on a Rollup-like network. According to Sam Kazemian, this feature will differentiate Fraxchain from other layer 2 solutions on Ethereumwhich generally depend on a single sequencer.
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Source: Flywheel DeFi Podcast
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