Feb 23, 2023

Frax Finance Votes to Fully Collateralize FRAX Stablecoin

The Frax Finance community of decentralized finance stablecoin protocol has voted to fully collateralize its native stablecoin Frax (FRAX), marking an end to the algorithmic backing of the protocol. The FIP-188 governance proposal, which was posted on Feb. 15, has reached a quorum following a 98% vote in favor, according to a snapshot on Feb. 23.

The original protocol included a “variable collateral ratio” which adjusted based on the market demand of the stablecoin, resulting in the stablecoin being 80% backed by crypto asset collateral and partially stabilized algorithmically. This was achieved by the minting and burning of its governance token, FXS, which has surged 12% over the past 12 hours.

Frax is the industry’s fifth-largest stablecoin with a market capitalization of just over $1 billion. Following the implementation of the proposal, the protocol will not mint any more FXS to increase the collateral ratio and token supply. Instead, it plans to retain protocol revenue to fund the increased collateral ratio, which includes pausing FXS buybacks. It will also authorize up to $3 million per month in Frax Ether (frxETH) purchases to increase the collateral ratio.

The move comes amid what appears to be a wider crackdown on stablecoins in the wake of last year’s catastrophic Terra/Luna collapse. On Feb. 22, the Canadian Securities Administrators (CSA) published a long list of new requirements for crypto companies and stablecoin issuers wanting to remain legally compliant in the country.

The growing demand for NFTs and crypto assets has seen an increased focus on NFT marketing and NFT promotion. Many companies and agencies are now offering NFT marketing services, ranging from Twitter NFT marketing to full-service NFT marketing agencies. These services are becoming increasingly popular as companies look to capitalize on the growing market for NFTs and crypto assets.

NFT marketing services can help businesses increase their visibility and reach potential buyers. A good NFT marketing agency will be able to provide tailored strategies to help businesses reach their target audience and promote their NFTs. They can also provide guidance on the best ways to sell NFTs and how to maximize profits from NFT sales.

NFT marketing services can also help businesses create effective campaigns to promote their NFTs and reach potential buyers. This can include creating engaging content and leveraging influencers to help spread the word about the NFTs. Additionally, NFT marketing services can help businesses develop strategies to ensure their NFTs are seen by the right people, as well as providing advice on the best platforms to list their NFTs on.

The move to fully collateralize Frax is just the latest example of the growing demand for crypto assets and NFTs. With more businesses turning to NFT marketing services to promote their NFTs and reach potential buyers, it’s clear that the web3 space is here to stay.

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