Frax Ether (FRXETH)
The Frax Finance protocol
Frax Finance is a decentralized finance (DeFi) protocol known for its unique approach to stablecoins and liquidity solutions. The protocol is designed to provide users with a stable and decentralized financial system, offering a variety of products that cater to different needs within the crypto ecosystem. Frax Finance's liquid staking derivative, frxETH, is one of these innovative products, providing users with the ability to stake Ethereum without sacrificing liquidity.
How frxETH works
Liquid staking with frxETH
| Ticker | FRXETH |
| Category | Decentralized Finance (DeFi) |
| Website | https://app.frax.finance/ |
| @fraxfinance | |
| Contract Addresses | |
|---|---|
| ethereum | 0x5e...f1 |
| moonbeam | 0x82...99 |
| fantom | 0x9e...ee |
| polygon-zkevm | 0xcf...97 |
| optimistic-ethereum | 0x68...b8 |
| binance-smart-chain | 0x64...e5 |
| arbitrum-one | 0x17...a2 |
| polygon-pos | 0xee...69 |
Liquid staking is a process that allows cryptocurrency holders to stake their assets in a blockchain network while retaining the ability to use or trade equivalent tokenized versions of those staked assets. frxETH serves as a liquid staking derivative for Ethereum, meaning that each unit of frxETH is backed by at least 1 ETH that is actively participating in validator nodes.
Validator nodes and security
The Ethereum network relies on a consensus mechanism known as proof-of-stake (PoS), which requires validators to lock up, or "stake," their ETH as collateral in order to participate in the network's consensus process. frxETH facilitates this by ensuring that the equivalent amount of ETH is locked in validator nodes, thereby contributing to the security and decentralization of the Ethereum network.
Benefits of using frxETH
By using frxETH, Ethereum holders can enjoy the benefits of staking without losing access to their assets. This is because frxETH can be traded, used in other DeFi applications, or held as a liquid asset, all while the underlying ETH remains staked in the network. This flexibility allows users to maximize their returns and participate in various financial activities within the crypto ecosystem.
The role of frxETH in the DeFi ecosystem
frxETH plays a significant role in the broader DeFi ecosystem by providing liquidity to Ethereum stakers. As a liquid staking derivative, it bridges the gap between staking and liquidity, enabling users to engage with other DeFi protocols and applications without being constrained by the traditional limitations of staking.