March 14th, 2022

How Frax beats the Rest

Written by jackchong.eth and 0xkowloon.eth

Stablecoins represent a large portion of the cryptocurrency’s total market capitalization, with a market size of $180 billion+. The simplest definition of a stablecoin is a digital currency with a value that's pegged to a ‘stable’ reserve asset, usually the U.S. dollar. For institutions, stablecoin is a wedge into the broader digital asset market: providing a higher yield and faster settlements to fiat whilst retaining the benefits of low volatility.

As much as crypto promises decentralization, stablecoins are still dominated by centralized products. 80%+ of the market is represented by fiat-backed assets such as USDC and USDT. These products are issued by centralized entities: Circle and Tether Holdings respectively.