Frax Finance, launched in 2020, is a DeFi protocol that introduces a novel stablecoin, FRAX, using a blend of algorithmic and fractional reserve mechanisms. This approach aims to maintain stability while enhancing scalability. FRAX is partially backed by collateral, offering a hybrid model that addresses the limitations of purely algorithmic stablecoins.

The platform generates revenue through transaction fees and governance participation. By mid-2023, Frax Finance had raised over $100 million in funding, reflecting strong investor confidence.

The company’s innovative approach and growing adoption in the DeFi sector have significantly boosted its valuation, positioning Frax as a notable player in the stablecoin and broader cryptocurrency market.