FRAX Stablecoin Upgrades to Chainlink Price Feeds
Frax, a novel fractional-algorithmic stablecoin protocol, has upgraded its entire oracle mechanism to Chainlink Price Feeds.
By integrating Chainlink’s industry-leading decentralized oracle network, users get even greater security and reliability around the minting and redemption of FRAX and FXS being consistently in accordance with a collateral ratio that reflects the most up-to-date and accurate global market prices. Simply put, FRAX has stronger data infrastructure in place for maintaining its peg, especially critical as FRAX scales in value.
This integration involves the use of Chainlink Price Feeds for both FXS/USD and FRAX/USD. We selected Chainlink as go-to oracle solution because its infrastructure is time-tested in production and proven to secure tens of billions of dollars in value for leading DeFi protocols, even amidst unexpected situations like exchange downtime, flash crashes, and data manipulation attacks via flash loans. Chainlink Price Feeds also run natively across many different blockchains, enabling them to quickly expand our protocol to other blockchains in the future.
Additionally, they are working closely with Chainlink Labs on our Frax Price Index (FPI), the world’s first attempt at creating a crypto native Consumer Price Index. The FPI will be a combination of a Chainlink CPI oracle custom made for Frax as well as new crypto native indices. The vision for the FPI is to create a new fully decentralized unit of account for stablecoins to peg to which is more inflation-resistant than the dollar but still price stable to a basket of goods.
“As FRAX begins to scale in TVL and tap into a wider user base across multiple blockchains, it’s critical to upgrade our oracle mechanism to Chainlink as a means of achieving stronger data quality assurances that further help maintain the peg,” stated Sam Kazemian, Founder of Frax. “Chainlink Price Feeds provide FRAX with robust market coverage along with the multi-chain infrastructure needed to rapidly expand and bring FRAX to more users around the world,” added CTO Travis Moore.
About Chainlink
Chainlink is the most widely used and secure way to power universally connected smart contracts. With Chainlink, developers can connect any blockchain with high-quality data sources from other blockchains as well as real-world data. Managed by a global, decentralized community of hundreds of thousands of people, Chainlink is introducing a fairer model for contracts. Its network currently secures billions of dollars in value for smart contracts across the decentralized finance (DeFi), insurance and gaming ecosystems, among others.
About Frax Finance
Frax is the first fractional-algorithmic stablecoin protocol. Frax is open-source, permissionless, and entirely on-chain. The vision for the Frax protocol is to provide a highly scalable, decentralized, algorithmic money in place of fixed-supply digital assets like BTC. FRAX is the only stablecoin with parts of its supply backed by collateral and parts of the supply algorithmic. The ratio of collateralized and algorithmic depends on the market’s pricing of the FRAX stablecoin. If FRAX is trading at above $1, the protocol decreases the collateral ratio. If FRAX is trading at under $1, the protocol increases the collateral ratio.
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