🔹 What is Frax (FRAX)?

Frax (FRAX) is a decentralized stablecoin that aims to maintain its value at approximately 1 US dollar (1 USD) through a mixed mechanism of collateral and algorithm. It is considered one of the first models in the category of algorithmic-collateral stablecoins. �

⚙️ How does it work?

🧠 Stability mechanism

Frax uses a mixed system of:

Real collateral (usually like USDC or other stable assets)

Algorithms to adjust the currency supply based on demand

📌 When the price of FRAX rises above $1:

The protocol increases the currency supply to lower the price towards $1.

📌 And when the price falls below $1:

The supply is reduced (for example, by buying back or burning the currency) to push the price towards $1.

This mechanism helps maintain stability even in volatile market conditions.