FraxNet is a cross-chain interoperability layer and stablecoin network developed by Frax Finance. It is designed as an account-based platform to facilitate the native minting, redemption, and earning of yield on frxUSD, a stablecoin fully backed by tokenized U.S. Treasury assets. ^{[1] [2]}

Overview

FraxNet functions as a protocol-native bridging solution that enables the frxUSD stablecoin to exist canonically across numerous blockchain ecosystems without the risks associated with traditional custodial or synthetic bridges. The platform's core objective is to merge decentralized finance (DeFi) with traditional financial infrastructure by using tokenized real-world assets (RWAs), specifically U.S. Treasuries, as collateral. This approach is intended to provide a stable, yield-bearing digital dollar that is accessible to both individual users and institutions. ^[3]

The system is presented as an "account-based platform," which provides a unified interface for users to manage their frxUSD holdings across more than 20 supported blockchains. Key functionalities include minting frxUSD on a 1:1 basis with approved collateral, redeeming it for U.S. dollars or other stablecoins, and earning yield generated from the underlying Treasury assets. FraxNet also incorporates features for regulatory compliance and offers a direct fiat off-ramp for verified users, allowing for the conversion of frxUSD into fiat currency in U.S. bank accounts. ^{[1] [2]}

History

Frax Finance publicly announced the FraxNet platform on October 1, 2025, when it opened a waitlist for public access. The announcement described FraxNet as an account-based platform for interacting with its flagship stablecoin, frxUSD, across multiple chains. The project was launched sometime after this initial announcement, with its official website later stating, "FraxNet is out!". The website's copyright is listed for the year 2025. ^{[2] [1]}

Technology

FraxNet's architecture is designed to ensure secure and efficient cross-chain operations for its native stablecoin, frxUSD, while aligning with financial regulations.

Core Architecture

FraxNet operates as a cross-chain interoperability layer that avoids the common pitfalls of traditional bridging solutions. Instead of creating "wrapped" or synthetic versions of an asset on different chains, FraxNet facilitates the native minting and redemption of frxUSD on each supported network. This ensures that every unit of frxUSD is a canonical and fully fungible representation of the stablecoin, directly redeemable and backed by the same pool of collateral. This "protocol-native" approach is designed to eliminate the custodial risks and de-pegging vulnerabilities often associated with third-party bridges. ^[3]

The platform leverages established cross-chain messaging standards to communicate between blockchains securely. This allows for the trust-minimized transfer of value and information, enabling users to move frxUSD between networks without relying on a centralized intermediary. The system is also designed to connect on-chain activities with off-chain financial systems, particularly through its fiat redemption capabilities. ^[3]

Cross-Chain Communication

To achieve its multi-chain functionality, FraxNet integrates established cross-chain messaging protocols:

• LayerZero: A generalized interoperability protocol that enables direct, trustless communication between different blockchains. FraxNet utilizes LayerZero for its underlying messaging infrastructure to coordinate state changes and asset transfers across its supported networks.
• Circle's Cross-Chain Transfer Protocol (CCTP): A permissionless protocol developed by Circle for natively transferring its USDC stablecoin between chains. FraxNet integrates CCTP to facilitate the movement of USDC, which can be used as a component of the collateral for minting frxUSD.

The use of these standardized protocols allows FraxNet to extend its reach to new blockchains without developing bespoke bridging solutions for each one. ^[3]

Smart Contract System

The FraxNet protocol is governed by a series of smart contracts that manage its core operations. The official documentation outlines several key components of its on-chain architecture:

• Proxy Architecture: Utilizes a standard proxy pattern, which allows the contract logic to be upgraded over time without changing the contract address that users and other protocols interact with.
• FraxNet Deposit Factory: A factory contract responsible for creating new, isolated deposit contract instances for users.
• FraxNet Deposit: A contract that manages individual user deposits and interactions with the protocol.
• RWA Redemption Coordinator: A specialized contract that orchestrates the complex process of redeeming on-chain frxUSD for its underlying off-chain real-world assets, such as U.S. Treasuries.
• FraxNet Beacon: A beacon contract used in conjunction with the proxy architecture to manage upgrades efficiently across multiple proxy instances.
• FraxNet Custodians: Contracts that define the roles, permissions, and responsibilities of various custodians or trusted parties within the system.

This modular architecture is designed for security, upgradeability, and transparent management of the protocol's functions. ^[3]

Regulatory Alignment

FraxNet is designed to operate in compliance with financial regulations. The announcement of the platform stated that its frxUSD stablecoin is "built to the GENIUS standard." According to the protocol's documentation, it is designed to align with regulations such as the GENIUS Act by holding short-term U.S. Treasury bills as the primary reserves for its compliant stablecoins. This focus on regulatory adherence extends to its user-facing features, such as the requirement for Know Your Business (KYB) and Know Your Customer (KYC) verification for users wishing to access direct fiat off-ramps or participate in revenue sharing. ^{[3] [2]}

frxUSD Stablecoin

The frxUSD stablecoin is the central asset of the FraxNet ecosystem, designed to maintain a stable value pegged to the U.S. dollar through full collateralization by tokenized real-world assets.

Collateral and Stability Mechanism

The stability of frxUSD is derived from its backing by a reserve of tokenized U.S. Treasury assets. The protocol describes the stablecoin as "fully collateralized," meaning that the value of the assets held in reserve is intended to be equal to or greater than the value of the circulating frxUSD supply. This RWA-backed model aims to provide a higher degree of stability and transparency compared to algorithmic or under-collateralized stablecoins. ^[1]

The specific tokenized U.S. Treasury assets mentioned as collateral include:

• Superstate's USTB: A tokenized U.S. Treasury bond fund.
• BlackRock's BUIDL: The BlackRock USD Institutional Digital Liquidity Fund, a tokenized money market fund.
• WisdomTree's WTGXX: A tokenized representation of a government money market fund.

By using these regulated, low-risk financial instruments as backing, FraxNet aims to ensure that frxUSD can be reliably redeemed at its peg. ^[1]

Minting and Redemption

FraxNet provides a straightforward mechanism for minting and redeeming frxUSD:

• Minting: Users can create new frxUSD on a 1:1 basis by depositing approved collateral into the FraxNet smart contract system. Accepted collateral includes other major stablecoins like USDC and USDT, as well as the approved tokenized U.S. Treasury assets.
• Redemption: Holders of frxUSD can redeem the stablecoin at a 1:1 ratio for U.S. dollars or other stablecoins such as USDC. For verified users who have completed the necessary compliance checks, FraxNet offers a direct fiat off-ramp, allowing frxUSD to be redeemed directly into a linked U.S. bank account via ACH or wire transfer.

This two-way process is fundamental to maintaining the stablecoin's peg to the U.S. dollar. ^{[1] [3]}

Features and Use Cases

FraxNet offers a range of features centered around its multi-chain stablecoin, targeting both DeFi users and institutions.

Platform Features

• Competitive Yields: The platform allows holders of frxUSD to earn a yield, which is generated from the underlying U.S. Treasury assets held in reserve. The promotional website stated an Annual Percentage Yield (APY) of 4.10%. ^[1]
• Revenue Sharing: Verified users who complete KYB/KYC procedures can participate in a revenue-sharing program, earning a portion of the yield generated by the protocol's reserves. ^[3]
• Multi-Chain Functionality: frxUSD is designed as a native asset across numerous blockchains, eliminating the need for third-party bridges and their associated fees and risks. ^[1]
• Security and Compliance: The platform is marketed as being built with "enterprise-level security and compliance," reflecting its focus on attracting institutional users and adhering to financial regulations. ^[1]

Supported Blockchains

FraxNet is designed to operate across a wide array of blockchain networks. The officially supported chains include:

• Abstract
• Arbitrum
• Aurora
• Avalanche
• Base
• Berachain
• BNB Smart Chain
• Ethereum
• Fraxtal
• Ink
• Katana
• Linea
• Mode
• Optimism
• Plume
• Polygon
• Polygon zkEVM
• Scroll
• Sei
• Solana
• Sonic
• Unichain
• X Layer
• ZKsync Era

This extensive support underscores the platform's goal of making frxUSD a ubiquitous stablecoin in the broader digital asset ecosystem. ^[1]

Use Cases

The frxUSD stablecoin and the FraxNet platform are positioned for several key applications within the crypto economy:

• Crypto Trading: As a stable trading pair on decentralized exchanges (DEXs) such as Uniswap, Curve, and Balancer. Its stability makes it a reliable quote asset for trading more volatile cryptocurrencies.
• Liquidity Provision and Yield Farming: Users can deposit frxUSD into liquidity pools on various DeFi protocols to earn trading fees and other rewards.
• Value Preservation: The stablecoin is intended to serve as a safe-haven asset, allowing investors to preserve their purchasing power during periods of high market volatility.

The platform highlights Ethereum, Polygon, and Arbitrum as particularly popular networks for these trading and DeFi use cases. ^[1]

Future Developments

The FraxNet official website has listed several features as "Coming Soon," indicating the planned expansion of its services to further bridge the gap between digital assets and traditional finance:

• Spendable Cards: The development of virtual and physical Visa cards that will allow users to spend their frxUSD holdings directly at supported merchants.
• Virtual Bank Accounts: The introduction of fiat deposit addresses that automatically convert incoming funds from traditional bank accounts into frxUSD.
• White Label Stablecoins: A service that will enable other projects and institutions to launch their own branded stablecoins using frxUSD and its underlying RWA collateral as the reserve asset.

These planned features aim to increase the utility and adoption of frxUSD as a medium of exchange and a foundational layer for other financial products. ^[1]

Ecosystem and Partnerships

FraxNet's operations are supported by a network of technology providers and established financial institutions that contribute to its infrastructure and collateral base.

Technology Partners

• LayerZero: Provides the core cross-chain messaging protocol that underpins FraxNet's interoperability.
• Circle: The integration of its Cross-Chain Transfer Protocol (CCTP) facilitates the native movement of USDC, a key collateral asset. ^[3]

Institutional Connections

The platform's reliance on tokenized U.S. Treasuries as collateral necessitates relationships with leading financial institutions involved in asset management and tokenization. The project lists several institutions as part of its ecosystem:

• Asset Managers / Issuers: BlackRock, Superstate, and WisdomTree are the issuers of the BUIDL, USTB, and WTGXX tokenized treasury products used as collateral.
• Other Financial Institutions: Securitize, Stripe, Bridge, and Lead Bank are also mentioned, likely playing roles in asset tokenization, payment processing, and banking services that connect the FraxNet protocol to the traditional financial system. ^[1]