Is FRAX share crypto a good investment?

FRAX share crypto

FXS might be a beneficial investment choice if you are seeking for virtual currencies with a high return. At 2022-09-05, the Frax share price was 6.159 USD. If you buy a Frax Share for $100 today, you will receive a total of 16.237 FXS.

Frax Share price prediction: Where to next for FXS?

Frax Finance is a dual-token stablecoin project founded in early 2020 by Sam Kazemian, an Iranian-American software programmer. The FRAX stablecoin, which has a multibillion-dollar market valuation, functions through a unique combination of algorithmic stability and collateralised reserves.

Frax Finance began as Decentral, a project founded by Kazemian and Stephen Moore, a conservative economist, former adviser to Donald Trump, and failed contender for a seat on the Federal Reserve Board.

Because of its non-stable collateralisation technique, Decentral was dubbed “stupid even by crypto standards” by New York magazine during an interview with Kazemian in June 2019.

But it is only one point of view. In this post, we will look into Frax Share (FXS), a governance token with its own set of functions and applications. What exactly is Frax Share (FXS), and what are the Frax Share price forecasts?

The FXS token: What you need to know

Let’s go through the essential data before diving into the Frax Share price estimate for 2022 and beyond.

FXS was live at the end of 2020, with 60% of the 99.9 million supply made available to the public through different yield farming, liquidity incentives, and exclusive governance ideas. Company tokens account for 35% of supply and are vested over 12-month and two-year periods. The remaining 5% is held in treasury for marketing and other company needs.

FXS enables for on-chain governance over Frax Finance’s protocol and system updates, which is one of the key advantages offered to holders. However, FXS’s value extends beyond that.

Simply said, FXS “steps in” to provide collateral when it is required. In essence, FXS inflation occurs when and when it is required. The value of FXS is closely tied to the demand and supply of FRAX via Frax Finance’s minting and redeeming operation; a robust FRAX stablecoin should potentially drive the value of FXS higher.

Frax Finance actively promotes arbitrage trading since dollar-pegged FRAX stablecoins may be created even if FRAX is slightly below the pegged market value, allowing arbitrageurs to profit from minor price changes.

Frax Finance also offers a long-term staking scheme for FXS holders who want to lock up their tokens for a lengthy period of time. It is recommended that you read the in-depth whitepaper to have a better understanding of the FXS coin.

FXS was trading at $6.43 on August 23, 2022, down about 2% in a recent 24-hour trading session, with a circulating supply of 16.2 million tokens and a market value of around $104 million.

From the Frax Finance whitepaper 

“Frax seeks to be the first stablecoin protocol to apply design concepts of both to build a highly scalable, trustless, exceptionally stable, and ideologically pure on-chain money,” according to the whitepaper. The Frax protocol is a two-token system that includes a stablecoin called Frax (FRAX) and a governance token called Frax Share (FXS). There is also a pool contract in the protocol that contains USDC collateral. With governance, pools may be created or withdrawn.

“We believe Frax’s fractional-algorithmic approach will change the game for stablecoins.” It has quick, real-time balancing, is algorithmic, has minimal governance, and is incredibly robust. We are certain that the Frax protocol will serve as a contrast to Bitcoin’s ‘hard money’ narrative by displaying algorithmic monetary policy to produce a trustless stablecoin that the whole crypto community can accept.”

FXS price movements

FXS has recently performed slightly differently than many other cryptocurrencies, maybe due to its strong link with the FRAX stablecoin. In fact, a high of $42.65 was recorded on January 12, 2022, at a period when Bitcoin was in freefall, pulling several other cryptocurrencies down with it.

However, the market quickly caught up with FXS, driving the trading price back down to $17.82 on 24 January, however this was still far higher than the all-time low of $1.52 observed in June 2021.

Following a statement by Terraform Labs’ creator, Do Kwon, announcing the introduction of 4pool, a liquidity pool consisting of the FRAX, TerraUSD, USDC, and Tether stablecoins, FXS achieved a new high of $42.67 on 3 April 2022, after surging by 80%.\

Numerous on-chain advancements continued into April, and the stablecoin remained among the top gainers on various centralised exchanges, including Binance and Crypto.com. The token reached a high of $37.28 on April 20 before falling precipitously in the following weeks.

Following the demise of the TerraUSD stablecoin, the price of FXS dropped by over 80% from its peak in April, with the token trading at $6.02 on 20 May. Following additional market turbulence, the token was valued $4.81 at the end of June.

The coin is presently trading at $6.43 as of August 23, 2022. So, with all of this in mind, where may FXS move next?

FXS forecaster targets

According to PricePrediction’s Frax Share price estimate for 2030, FXS might reach $168.05 in the long term. Frax Share’s average price projection for 2023 is $13.03 and $25.96 for 2025, according to the forecasters.

According to TechNewLeader’s FXS price prediction targets, the maximum target for 2022 is $8.12. It predicts a Frax Share price of $24.41 in 2025, with a maximum of $155.02 in 2030.

Frax Share coin price forecast by DigitalCoinPrice: the coin will average $8.30 in 2022. According to the website, the coin could be worth an average of $12.37 by 2025, with a year-on-year increase to $29.92 by 2030.

Frax Share price estimate by WalletInvestor is $11.95 for the next 12 months and $32.55 for the next five years.

Keep a few things in mind. First, because the value of FXS is strongly dependent on the success of the FRAX stablecoin, any Frax Share price forecast should take the FRAX stablecoin’s potential for growth, as well as the implications of the recent TerraUSD crash on 4pool, into consideration.

Furthermore, while forecaster forecasts might be useful as a guide, they should not be considered true financial advice. Further independent research is always encouraged because cryptocurrencies are extremely volatile, and previous success is not a guarantee of future outcomes. Never put more money into something than you can afford to lose.

FAQs

What is the total number of Frax Share coins?
There are presently 16.2 million FXS in circulation, out of a total supply of 99.9 million.

Is it wise to invest in Frax Share?
The sustainability of the FXS token is strongly dependent on the popularity of the FRAX stablecoin, therefore any serious investor should educate themselves on the wider Frax Finance ecosystem and fundamentals before investing.

Will the price of Frax Share rise?
While forecaster price forecasts should always be taken with a grain of salt, most analysts anticipate Frax Share will increase in value. Most objectives for 2022 are modest, however longer-term estimates are more optimistic.

Should I purchase Frax Share?
FXS allows investors to invest in the Frax Finance stablecoin initiative while also offering governance and other functionality.

Currency.com does not offer recommendations, thus any possible investment should be backed up by independent research, such as reading the whitepaper and evaluating social media and other community involvement.