Frax Finance is a decentralized stablecoin protocol that introduces innovative stablecoins to the crypto ecosystem. The protocol currently issues three distinct stablecoins: FRAX, which is pegged to the USD; the Frax Price Index (FPI) stablecoin, which is unique as it's pegged to a basket of consumer goods, creating its own unit of account separate from any national currency.
Frax Share (FXS) is the governance token of the entire Frax ecosystem of smart contracts which accrues fees, revenue, and excess collateral value. FPIS is the governance token of FPI only and splits its value capture with FXS holders.
FRAX is about to issue its third version of the stablecoin. v3 is a dollar-pegged stablecoin that uses AMO smart contracts and permissionless, non-custodial subprotocols as stability mechanisms. The two internal subprotocols used as stability mechanisms are Fraxlend, a decentralizedl lending market and Fraxswap, an automated market maker (AMM) with special features. The external subprotocol used as a stability mechanism is Curve. Additional subprotocols and AMOs can be added with governance allowing FRAX v3 to incorporate future stability mechanisms seamlessly as they are discovered.