# frxUSD

> frxUSD, the stablecoin of the Frax Finance Protocol, is fully collateralized and pegged to the US dollar. It transitioned from a fractional model to full collat...

- Canonical URL: https://iq.wiki/wiki/frxusd
- Categories: Cryptoassets
- Created: 2024-12-13T01:02:22.302Z
- Last updated: 2026-07-14T23:02:05.211Z
- Source: IQ.wiki — the world's largest blockchain and crypto encyclopedia (https://iq.wiki)

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**frxUSD (formerly FRAX)** is a fully-collateralized [stablecoin](https://iq.wiki/wiki/stablecoin) issued by the [Frax Finance](https://iq.wiki/wiki/frax-finance) Protocol, designed to be redeemable for [fiat currency](https://iq.wiki/wiki/fiat-money). It operates under a hybrid framework that combines offchain custodians with onchain infrastructure developed by the protocol for minting and redemption. [\[2\]](#cite-id-odqfqhdIr3)

## Overview

frxUSD is the [stablecoin](https://iq.wiki/wiki/stablecoin) of the [Frax Finance](https://iq.wiki/wiki/frax-finance) Protocol and is designed to be pegged to the US dollar. It is the first and only [stablecoin](https://iq.wiki/wiki/stablecoin) with parts of its supply backed by collateral and part of the supply fractionally stabilized. On February 23rd, 2023, the [Frax Finance](https://iq.wiki/wiki/frax-finance) community voted to fully collateralize it. [\[3\]](#cite-id-GXBCUEOzlOzbmqiM)

The price of frxUSD and collateral are all calculated with a time-weighted average of the [Uniswap](https://iq.wiki/wiki/uniswap) pair price and the [ETH](https://iq.wiki/wiki/ethereum):USD [Chainlink](https://iq.wiki/wiki/chainlink) oracle. The [Chainlink](https://iq.wiki/wiki/chainlink) [oracle](https://iq.wiki/wiki/oracle) allows the protocol to get the true price of USD instead of an average of stablecoin pools on Uniswap. Historically, at genesis, frxUSD (formerly [FRAX](https://iq.wiki/wiki/frax)) was 100% collateralized, meaning that [minting](https://iq.wiki/wiki/minting) frxUSD only requires placing collateral into the [minting](https://iq.wiki/wiki/minting) contract. During the fractional phase, [minting](https://iq.wiki/wiki/minting) frxUSD required the appropriate ratio of collateral and [burning](https://iq.wiki/wiki/token-burn) the ratio of [FRAX](https://iq.wiki/wiki/frax) (formerly FXS). This design was implemented so that as the velocity of the system increases, it becomes easier and safer to include volatile cryptocurrencies such as [ETH](https://iq.wiki/wiki/ethereum) and wrapped [BTC](https://iq.wiki/wiki/bitcoin) into future pools with governance.

### Frax Staking

Frax Finance protocol allows frxUSD holders to lock up frxUSD tokens to generate yield on various pools on different chains. [\[1\]](#cite-id-nw8VHnOKdi)

## ATW Partners Investment in frxUSD

On January 14, 2026, Frax announced a joint initiative with investment firm ATW Partners and digital asset custodian [BitGo](https://iq.wiki/wiki/bitgo). The partnership centers on an institutional investment into frxUSD to bridge traditional and decentralized finance. Key details of the announcement include:

* **Investment:** ATW Partners agreed to deploy up to $50 million into frxUSD.
* **Custody:** [BitGo](https://iq.wiki/wiki/bitgo) Bank & Trust will provide qualified custody for the frxUSD held by ATW Partners.
* **Reserve Backing:** The frxUSD reserves are backed by tokenized U.S. Treasury exposure via a WisdomTree government money market digital fund (WTGXX) on the [FraxNet](https://iq.wiki/wiki/fraxnet) platform.

Frax founder [Sam Kazemian](https://iq.wiki/wiki/sam-kazemian) stated that the partnership demonstrates the utility of stablecoins for modern financial institutions. The firms also stated their intention to expand the partnership to develop further institutional and B2B applications for frxUSD. [\[4\]](#cite-id-A71D1v17GuyCdw5P)