Legacy Frax Dollar (FRAX) is a US dollar pegged stablecoin launched by Frax Finance in December 2020. Led by founder Sam Kazemian, it is widely known as the first fractional-algorithmic stablecoin.
Under the 2025 North Star proposal, the original FRAX stablecoin was renamed 'Legacy Frax Dollar'. At the same time, the former governance token FXS took over the FRAX name.
Early FRAX combined collateral such as USDC with algorithmic mechanisms to hold its one dollar peg. The collateral ratio adjusted with market conditions, and the uncollateralized share was balanced through minting and burning FXS.
The protocol used modules called AMOs (Algorithmic Market Operations) to deploy collateral into DeFi and manage liquidity and the peg. A 2023 governance decision later set the path toward full collateralization.
Data provided by CoinGecko
FRAX has no fixed maximum supply; tokens are minted on demand and burned when redeemed. The wider Frax ecosystem has included products such as frxETH, Fraxswap and the Fraxtal layer 2 chain.
In 2025 governance ended the guaranteed 1-to-1 migration between Legacy FRAX and the newer frxUSD stablecoin. Under FIP-430 the two run as separate monetary systems with distinct assets and liabilities, and Legacy FRAX is treated as a maintained legacy asset.
FRAX pioneered a hybrid model between collateralized and algorithmic stablecoins and shaped later stablecoin design debates. It is also noted for decentralized governance and on-chain transparency.
However, with development focus shifted to frxUSD, Legacy FRAX may see lower liquidity and fewer use cases. Without an official migration guarantee, users should weigh secondary market depeg risk, smart contract risk and regulatory uncertainty.
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