- TFS Tokens reflect a user’s claim on deposited assets and may be redeemed at will.
- The system uses two assets: the Frax (FRAX) stablecoin and the Frax Shares (FXS).
The crypto market is never dull. However, FXS, a governance token of a lesser-known fractional-algorithmic stablecoin protocol, Frax, has risen by 80% in a week.
According to CoinMarketCap, the token has earned almost twice as much as bitcoin has gained so far this month. Furthermore, the token price today is $12.87 USD with a 24-hour trading volume of $10,206,559 USD.
Frax, an Ethereum-based stablecoin, is partly collateralized by both assets and cryptographic techniques. The system uses two assets: the Frax (FRAX) stablecoin and the Frax Shares (FXS) governance and utility token.
FXS Linked to FRAX Demand
As collateral, a user may contribute USDC stablecoin and FXS tokens in quantities determined by the Frax collateral ratio (CR). For example, assuming a 50% collateral ratio, one FRAX may be obtained by contributing $0.50 USDC and $0.50 FXS. For each FRAX stablecoin delivered, the user gets $0.50 USDC and $0.50 FXS. So, investor demand for FXS is linked to FRAX demand.
Tokemak opened an FXS-specific token reactor where FXS holders may deposit coins and get TOKE or tFXS tokens in exchange. Moreover, TFS Tokens reflect a user’s claim on deposited assets and may be redeemed at will.
The current annual percentage rate on FXS deposits is 47%, according to Tokemac’s website. That beats bitcoin’s cash and carry arbitrage’s recent annualized return of 13%. (Buy spot and sell three-month futures). Moreover, the anticipation of Frax V3, which protocol creator Sam Kazemian compares to ETH 2.0, is Something that must be driving the FXS token higher.
