{"id":"frxeth-frax-ether","title":"Frax Ether (frxETH)","content":"**Frax Ether (frxETH)** is a [liquid ETH staking](https://iq.wiki/wiki/liquid-staking) derivative and [stablecoin](https://iq.wiki/wiki/stablecoin) system that aims to simplify and secure the [Ethereum](https://iq.wiki/wiki/ethereum) [staking](https://iq.wiki/wiki/staking) process. It leverages the [Frax Finance](https://iq.wiki/wiki/frax-finance) ecosystem to provide a [DeFi](https://iq.wiki/wiki/defi)-native way for users to earn interest on their [ETH](https://iq.wiki/wiki/ether-eth) holdings while maximizing their staking yield. [\\[1\\]](#cite-id-rkn36wewxbe)[\\[2\\]](#cite-id-1kf1yks5bx8)\n\n$$widget0 [YOUTUBE@VID](ovcG90sEY4U)$$\n\n## Overview\n\nThe Frax Ether system comprises three primary components, Frax Ether (frxETH), Staked Frax Ether (sfrxETH), and the Frax ETH Minter:\n\n### Frax Ether (frxETH) \n\n![](https://ipfs.everipedia.org/ipfs/QmeWGAYsMFxxW9a4CDGhtAgo62MRFJRLeDEtHCjJjq8exf)\n\nfrxETH acts as a stablecoin loosely pegged to ETH, so 1 frxETH always represents 1 ETH and the amount of frxETH in circulation matches the amount of ETH in the [Frax](https://iq.wiki/wiki/frax) ETH system. When ETH is sent to the frxETHMinter, an equivalent amount of frxETH is [minted](https://iq.wiki/wiki/minting). Holding frxETH on its own is not eligible for [staking](https://iq.wiki/wiki/staking) yield and should be thought of as analogous as holding ETH. [\\[3\\]](#cite-id-wum3k5wa07j) [\\[2\\]](#cite-id-1kf1yks5bx8)\n\n### Staked Frax Ether (sfrxETH) \n\n![](https://ipfs.everipedia.org/ipfs/QmcjQ9b42H6hdEk2mwfXXGzu5ytdBRFv6SntPHBoo3i1Sq)\n\n[sfrxETH](https://iq.wiki/wiki/frax-ether-frxeth-and-sfrxeth) is an [ERC-4626](https://iq.wiki/wiki/erc-4626)-compliant vault that captures [staking](https://iq.wiki/wiki/staking) rewards generated by [Frax](https://iq.wiki/wiki/frax) ETH validators. Users can deposit frxETH into the vault in exchange for [sfrxETH](https://iq.wiki/wiki/frax-ether-frxeth-and-sfrxeth), which represents a proportional share of the vault’s total frxETH holdings. As [staking](https://iq.wiki/wiki/staking) rewards accumulate, new frxETH is [minted](https://iq.wiki/wiki/minting) and added to the vault. This causes the exchange rate between [sfrxETH](https://iq.wiki/wiki/frax-ether-frxeth-and-sfrxeth) and frxETH to increase over time, allowing users to redeem [sfrxETH](https://iq.wiki/wiki/frax-ether-frxeth-and-sfrxeth) for more frxETH than initially deposited. The design mirrors other auto-compounding yield-bearing tokens, such as aUSDC or [cUSDC](https://iq.wiki/wiki/cusdc), distributing [staking](https://iq.wiki/wiki/staking) rewards among holders based on their share of the total [sfrxETH](https://iq.wiki/wiki/frax-ether-frxeth-and-sfrxeth) supply.  [\\[7\\]](#cite-id-wX1IMbXcrE)\n\n### Frax ETH Minter (frxETHMinter)\n\nFrax ETH Minter enables exchanging ETH for frxETH. It brings ETH into the [Frax](https://iq.wiki/wiki/frax) ecosystem and [mints](https://iq.wiki/wiki/minting) new frxETH equal to the amount of ETH sent. The platform also sets up new validator nodes as needed. [\\[2\\]](#cite-id-1kf1yks5bx8) [\\[8\\]](#cite-id-m2SuZDsvDN)\n\n## FrxETH v2\n\nLaunched in June 2023 by founder [Sam Kazemian](https://iq.wiki/wiki/sam-kazemian), the frxETH v2 protocol allows users to lend and borrow ETH. According to Kazemian, FraxETH v2 is designed to be more efficient and decentralized than other protocols. [\\[4\\]](#cite-id-38c45dfbpeq)\n\nIn an X thread, Kazemian explained that FraxETH v2 works by creating a peer-to-pool lending market: Users who want to lend ETH can do so by depositing it into the FraxETH v2 pool, and Users who want to borrow ETH can do so by taking out a loan against their ETH collateral. [\\[4\\]](#cite-id-38c45dfbpeq)\n\nThe interest rate for borrowing ETH is set by market forces and utilization rates. There are no hardcoded fees or commissions. This signifies a competitive interest rate and a high demand for ETH. [\\[6\\]](#cite-id-hlgjvbivgk8)\n\n> “If you treat it like a lending market \\[frxETH v2 is] basically the most efficient LSD(Lending-Staking-Decentralized) protocol because everyone that is good at running a validator will want to borrow our ETH” at the lowest rates.\" - Sam Kazemian said in an interview[\\[6\\]](#cite-id-adht0240879)\n\n$$widget0 [YOUTUBE@VID](sa4Kz8KyBnU)$$\n\nIn comparison, frxETH v1 allows users to deposit [ETH](https://iq.wiki/wiki/ether-eth) and receive frxETH tokens. These frxETH tokens can be staked to earn sfrxETH tokens as staking rewards. Alternatively, users can also pair their frxETH tokens with ETH-frxETH on [Curve Finance](https://iq.wiki/wiki/curve-finance) to participate in CRV mining.\n\nIn frxETH v2, users have the ability to borrow validators based on their loan-to-value (LTV) ratio. To “borrow” validators, users provide a specific amount of ETH as collateral, which can exceed 8 ETH. This collateral gives users the right to borrow and operate validators on [Frax Finance.](https://iq.wiki/wiki/frax-finance) Simultaneously, the interest on the loan is directly deducted from the user’s ETH and validator rewards.\n\n![image](https://ipfs.everipedia.org/ipfs/QmdcUPDVUsqZgDDVbV8ZJxWsmTzfNP9DUG6dgLWWzwBeTw)","summary":"Frax Ether (frxETH) is a liquid staking derivative and stablecoin system in the Frax Finance ecosystem, designed to simplify and reward Ethereum staking.","images":[{"id":"QmWXR2i9fKLVNJLVgQBBr1fnKGeD71qXvGJtp1jTcoSNK3","type":"image/jpeg, image/png"}],"categories":[{"id":"cryptocurrencies","title":"Cryptocurrencies"}],"tags":[{"id":"Ethereum"},{"id":"Protocols"},{"id":"Stablecoins"}],"media":[{"id":"https://www.youtube.com/watch?v=ovcG90sEY4U","size":"0","name":"ovcG90sEY4U","type":null,"source":"YOUTUBE"},{"id":"https://www.youtube.com/watch?v=sa4Kz8KyBnU","size":"0","name":"sa4Kz8KyBnU","type":null,"source":"YOUTUBE"},{"id":"QmdcUPDVUsqZgDDVbV8ZJxWsmTzfNP9DUG6dgLWWzwBeTw","size":"0.07","name":"image","type":"GALLERY","source":"IPFS_IMG"},{"id":"QmeWGAYsMFxxW9a4CDGhtAgo62MRFJRLeDEtHCjJjq8exf","name":"frxeth.png","caption":"","thumbnail":"QmeWGAYsMFxxW9a4CDGhtAgo62MRFJRLeDEtHCjJjq8exf","source":"IPFS_IMG"},{"id":"QmcjQ9b42H6hdEk2mwfXXGzu5ytdBRFv6SntPHBoo3i1Sq","name":"sfrxeth.png","caption":"","thumbnail":"QmcjQ9b42H6hdEk2mwfXXGzu5ytdBRFv6SntPHBoo3i1Sq","source":"IPFS_IMG"}],"metadata":[{"id":"references","value":"[{\"id\":\"rkn36wewxbe\",\"url\":\"https://docs.frax.finance/frax-ether/overview\",\"description\":\"docs- overview\",\"timestamp\":1696863338260},{\"id\":\"1kf1yks5bx8\",\"url\":\"https://www.coindesk.com/markets/2022/10/28/frax-finance-unveils-ether-liquid-staking-service-with-a-dual-token-model/\",\"description\":\"Stablecoin Issuer Frax Finance Unveils Ether Staking Service With a Dual Token Model\",\"timestamp\":1696865962756},{\"id\":\"wum3k5wa07j\",\"url\":\"https://docs.frax.finance/frax-ether/frxeth-and-sfrxeth\",\"description\":\"docs - frxETH\",\"timestamp\":1696934755588},{\"id\":\"38c45dfbpeq\",\"url\":\"https://twitter.com/samkazemian/status/1664737658797686784\",\"description\":\"sam kazemian frxETH v2 launch\",\"timestamp\":1696937516419},{\"id\":\"hlgjvbivgk8\",\"url\":\"https://flywheeldefi.com/article/what-is-liquid-staking-and-how-is\",\"description\":\"What is Liquid Staking and How is frxETH V2 Radically Changing It\",\"timestamp\":1696948009946},{\"id\":\"adht0240879\",\"url\":\"https://youtu.be/sa4Kz8KyBnU\",\"description\":\"Youtube - Sam K's interview with Defi Dave\",\"timestamp\":1696948992398},{\"id\":\"wX1IMbXcrE\",\"description\":\"Frax Docs: frxETH and sfrxETH\\n\",\"timestamp\":1748096794046,\"url\":\"https://docs.frax.com/protocol/assets/frxeth/frxeth_sfrxeth\"},{\"id\":\"m2SuZDsvDN\",\"description\":\"Frax Docs: Frax Ether Overview\",\"timestamp\":1748097028984,\"url\":\"https://docs.frax.com/protocol/assets/frxeth/overview\"}]"},{"id":"twitter_profile","value":"https://x.com/fraxfinance"},{"id":"github_profile","value":"https://github.com/FraxFinance"},{"id":"discord_profile","value":"https://discord.com/invite/fraxfinance"},{"id":"website","value":"https://frax.finance/"},{"id":"fraxscan","value":"https://fraxscan.com/token/0xfc00000000000000000000000000000000000006"},{"id":"coingecko_profile","value":"https://www.coingecko.com/en/coins/frax-ether"},{"id":"etherscan","value":"https://etherscan.io/token/0x5e8422345238f34275888049021821e8e08caa1f"},{"id":"coinmarketcap_url","value":"https://coinmarketcap.com/currencies/frax-finance-frax-ether/"},{"id":"telegram_profile","value":"https://t.me/fraxfinance"},{"id":"bscscan","value":"https://bscscan.com/token/0x64048a7eecf3a2f1ba9e144aac3d7db6e58f555e"},{"id":"arbiscan","value":"https://arbiscan.io/token/0x178412e79c25968a32e89b11f63b33f733770c2a"},{"id":"polygonscan","value":"https://polygonscan.com/token/0xee327f889d5947c1dc1934bb208a1e792f953e96"},{"id":"medium_profile","value":"https://fraxfinancecommunity.medium.com/"},{"id":"previous_cid","value":"\"https://ipfs.everipedia.org/ipfs/QmZj9Wc32jpm1t1sMkijfyrL9y57n8bDYBVss3kpbsmkcN\""},{"id":"commit-message","value":"\"Based on the empty changes provided, a specific message cannot be generated.\\n\\nHere is a generic placeholder message suitable for minor, unspecified changes:\\n\\nGeneral wiki article improvements.\""},{"id":"previous_cid","value":"QmZj9Wc32jpm1t1sMkijfyrL9y57n8bDYBVss3kpbsmkcN"}],"events":[{"id":"bpcq0OoiL4","date":"2022-10","title":"Date Founded","type":"CREATED","description":"Frax Finance’s frxETH system was launched on October 13, 2022","link":"https://www.coindesk.com/markets/2022/10/28/frax-finance-unveils-ether-liquid-staking-service-with-a-dual-token-model/"},{"id":"zayDnGpko2","date":"2023-06","title":"FrxETH v2 Launch","type":"DEFAULT","description":"frxETH v2 was launched in June 2023","link":"https://twitter.com/samkazemian/status/1664737658797686784"}],"user":{"id":"0x8af7a19a26d8fbc48defb35aefb15ec8c407f889"},"author":{"id":"0x212Cb3F4aE6611054637f9f78F18fB628AD258bb"},"language":"en","version":1,"linkedWikis":{"blockchains":["frax-finance"],"founders":["sam-kazemian","travis-moore"],"speakers":[]}}