According to the voting result from the community, Frax Finance will fully secure its ecosystem stablecoin and phase out its algorithmic support.
The increasing pressure on stablecoins has also put pressure on stablecoin issuer crypto companies. In particular, the Terra crisis experienced last year revealed that algorithmic stablecoins are in a structure that can explode at any moment. Frax Finance, one of the projects of this nature, is making changes for its stablecoin, which it puts forward with its algorithmic support. Frax will fully collateralize its ecosystem stablecoin and bid farewell to its algorithmic support.
Frax Finance Focused on Ecosystem Stablecoin
Decentralized finance and stablecoin protocol Frax Finance will fully secure its native stablecoin FRAX. As a result of this voted decision, the previous algorithmic support structure will be terminated.
The FIP-188 governance proposal, which will replace FRAX’s collateralization model and was first published on February 15, reached a quorum with 98 percent yes, according to the snapshot on February 23.
In this proposal to the community, it was stated that algorithmic support in FRAX will be completely removed and this will happen gradually.
Also, after the proposal is implemented, the protocol will not print any more FXS to increase the margin rate and token supply.
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