Frax Finance Launches Fraxlend, its Borrowing and Lending Arm

Frax Finance, a DeFi platform founded by Sam Kazemian has launched Fraxlend, its native market for lending and borrowing. 

The Frax Finance Fraxlend’s Uniqueness

With Fraxlend, users can borrow or lend assets with any token of their choice as far as it is listed on the Chainlink data feed. According to Drake Evans who is a core developer at Frax Finance, the Fraxlend lending and borrowing marketplace holds two different use cases.

The first is that Fraxlend will permit the minting of the stablecoin FRAX via a lending process on the protocol. FRAX, the native token of Frax Finance is the first stablecoin with a dual hybrid algorithm. It is open-sourced, permissionless, and deployed on the Ethereum (ETH) blockchain. It is currently pegged at $1 per unit.

Fraxlend allows the Frax Finance protocol to directly lend FRAX and earn interest through existing money markets. 

Initially, this could only be achieved by taking an over-collateralized loan on a lending platform like Curve.Finance was recently assisted by Binance to recover 83% of stolen funds from its network. Now with Fraxlend, the process can now be conducted in-house without engaging an external lending platform.

In turn, the extra cash will be generated for treasury shares and to purchase back and burn the Frax Finance governance token, FXS in a manner similar to how MakerDAO burns MKR from stability fees. 

Secondly, Drake emphasized that Fraxlend possesses the ability to design custom term sheets for protocol-to-protocol deals and for over-the-counter (OTC) debt structures. These OTC will permit the establishment of on-chain decentralized autonomous organizations (DAOs) and also allow the transparent competition of transactions. 

Fraxlend Use Cases Are Novel

DeFi lending platforms are known to brandish a high level of innovation and Fraxlend is not an exception.

Sam Kazemian stated that “Fraxlend is one of the newest generations of lending protocols that will showcase new innovations in onchain debt origination. Some of these features have never been built before in any kind of lending system so we are extremely excited to finally bring these use cases to DeFi.”

Meanwhile, the ultimate goal of the Frax protocol is “provide a highly scalable, decentralized, algorithmic money in place of fixed-supply digital assets like BTC.”