Frax Finance

16 May 2025 10:11

Yes, Terra Luna and its stablecoin TerraUSD (UST) experienced a significant collapse in 2022. The TerraUSD stablecoin, which was supposed to maintain a peg to the US dollar, lost its peg and collapsed, causing a dramatic drop in the price of the LUNA token. This event led to significant losses in Terra-based DeFi applications and a 99.9% drop in LUNA token prices. Following this, the Terra community decided to halt minting to safeguard users and investors. Terra has since launched a new chain and coin, Luna 2.0, while the old Luna was rebranded as Terra Classic, known as LUNC.

Read more about TerraClassicUSD (USTC) here.

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Frax Finance

16 May 2025 10:10

Frax USD and Terra Luna USD (UST) are both algorithmic stablecoins, but they have different mechanisms and histories.

Frax USD (FRAX):
- Mechanism: Frax is a partially algorithmic stablecoin, meaning it is backed by a combination of collateral and an algorithmic mechanism. It uses a fractional reserve system where part of the supply is backed by collateral (like USDC) and the rest is stabilized algorithmically.
- Strengths: Frax's hybrid model provides a balance between stability and capital efficiency. It has shown resilience in volatile markets.
- Weaknesses: The reliance on collateral can limit scalability, and the algorithmic component still carries some risk of de-pegging.
- Opportunities: As the stablecoin market grows, Frax can expand its user base by leveraging its unique model.
- Threats: Regulatory changes and competition from fully collateralized stablecoins could pose challenges.

Terra Luna USD (UST):
- Mechanism: UST was a fully algorithmic stablecoin, maintaining its peg through a "burn and mint" mechanism with the LUNA token. When UST demand increased, LUNA was burned to mint more UST, and vice versa.
- Strengths: The system was highly scalable and capital efficient during periods of growth.
- Weaknesses: The reliance on LUNA's value for stability made it vulnerable to market fluctuations. This was evident in its collapse in May 2022.
- Opportunities: Before its collapse, UST had significant adoption in the Terra ecosystem, offering high yields through protocols like Anchor.
- Threats: The collapse highlighted the risks of fully algorithmic models, leading to loss of trust and regulatory scrutiny.

In summary, while both Frax and Terra aimed to innovate in the stablecoin space, Frax's hybrid model has shown more resilience compared to Terra's fully algorithmic approach, which ultimately led to its downfall.

Read more about Frax Finance here and Terra here.

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Frax Finance

16 May 2025 09:53

Yes, the name "Frax" in the Frax USD stablecoin does indeed derive from the concept of fractional reserves used in the banking system. Frax was the first fractional algorithmic stablecoin, meaning that part of its supply was backed by collateral and part was stabilized algorithmically. This approach was inspired by the fractional reserve banking system, where only a fraction of bank deposits are backed by actual cash on hand and available for withdrawal.

Read more about FRAX here.

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Frax Finance

16 May 2025 09:51

Welcome to AIDEN! 🤖✨

To get started here's a quick guide on how you can interact with me:
- You can ask me questions by tagging me with @IQGPTChatBot
- For instance, @IQGPTChatBot what is the price of IQ?, @IQGPTChatBot who is the founder of Bitcoin?
- You can also ask me questions with the /ai command like /ai what is the price of IQ?

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Frax Finance

16 May 2025 09:31

https://www.theblock.co/post/354583/brazils-meliuz-buys-274-btc

Frax Finance

16 May 2025 06:59

This is a very useful scenario for some regulatory regions where opening an account is troublesome and it is not possible to directly purchase US stocks with US dollars

Frax Finance

16 May 2025 06:54

Can frxusd be used to purchase US stocks through some medium?

Frax Finance

16 May 2025 06:21

Whoever can help Bessent sell off this $2 trillion US Treasury bond will be the king of the RWA race😀

Frax Finance

16 May 2025 03:50

WisdomTree backing secured

Frax Finance

16 May 2025 02:59

https://etherscan.io/tx/0x0accb08ada1870ea1673e9b3f92e0add0c752c10562eb3e7f7738d3c4392a6be

Frax Finance

15 May 2025 23:46

this would help us so much

Frax Finance

15 May 2025 22:50

https://x.com/Dav1dDuong/status/1923091441657483664

Frax Finance

15 May 2025 22:47

Filing cloture requires 60 votes. Thune is indicating his intent to expedite the bill.

Frax Finance

15 May 2025 22:41

https://facts.frax.finance/frxusd/balance-sheet

Frax Finance

15 May 2025 22:40

https://x.com/SenateCloakroom/status/1923080020630671519

Frax Finance

16 May 2025 10:11

/ai Terra Luna USD is rekt?

Frax Finance

16 May 2025 10:10

/ai if I understand well Frax was a pioneer in developing algorithmic stablecoin
Wat is the different story between Frax USD and Terra Luna USD? Make a SWOT analysis for 2 projects

Frax Finance

16 May 2025 09:53

/ai does the original Frax USD stablecoin name come from fractional reserves (Frax) used in the banking system?

Frax Finance

16 May 2025 09:44

Now that Frax network is becoming the onchain central banking system, would the team focus on a good and secure wrapped BTC, for users, and hold it in asset, as a reserve?

Frax Finance

16 May 2025 07:25

frax is underrated and organic project, Lol

Frax Finance

16 May 2025 06:55

WisdomTree Government Money Market Digital Fund (WTGXX) 💪🍾

Frax Finance

16 May 2025 06:35

Hello, a question here. Back when FXS was used to mint the FRAX stablecoin, a big chunk of it was either burned or locked, so the actual circulating supply was much lower.

Now that it's renamed as FRAX and the stablecoin part is gone, aren’t those previously locked FXS basically back in circulation?

Frax Finance

16 May 2025 06:11

So can I say, frxUSD would be what we will be majorly pushing in the future?

While legacy stablecoin, frxETH ext will continue to exist, but that would be the under our more decentralized product suite?

I mean we will have compliant product suite - frxusd, and decentralized product suite - legacy stable, LST

And frax lend, bamm, being where above products interact with users

Frax Finance

16 May 2025 03:25

Ethereum stablecoin volume reached a new all-time high in April, hitting $908 billion, as institutions, tech giants, and Trump jump in

— link | @unfolded

Frax Finance

16 May 2025 00:53

Please do it if you're a US citizen, it really does make a difference. https://x.com/standwithcrypto/status/1923142534856847634?=13

Frax Finance

15 May 2025 22:58

so they are gonna try again next week it sounds like

Frax Finance

15 May 2025 22:48

They didn’t get 60 votes last week

Frax Finance

15 May 2025 22:46

We need 800m LTv. to start rev buyback of frax. 10x to go

Frax Finance

15 May 2025 22:41

What’s the current frxUSD tvl?

Frax Finance

15 May 2025 22:25

https://news.frax.com/p/frax-finance-biweekly-project-update-2bc