In this week's episode, we talk about FRAX, a fractionalised algorithmic stablecoin. Using the token economics framework that we have explained in other videos, we will analyse the token economics of the $FRAX stablecoin, perform stability analysis on it, and give some opinions about FRAX.

Timestamps:

0:00 – Introduction & Contents

0:36 – What is Frax?

2:38 – Dual-Token Mechanism explained

3:34 – Reserve Mechanism explained

4:36 – How to create $FRAX stablecoin

7:11 – How to Maintain Stability

11:10 – Stability Analysis of FRAX

16:32 – Opinion: Elasticity in Collateral

17:15 – Opinion: backing by USDC

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