Frax Finance Launches Layer-2 Fraxtal, Prepares FXTL Reward Points

The renowned DeFi project on Ethereum, Frax Finance, has launched the mainnet of its layer-2 solution, Fraxtal, for select partners and shared details about its FXTL reward points program.

Fraxtal is a layer-2 solution developed by Frax Finance on Ethereum since mid-2023, utilizing Optimism's OP Stack and being EVM-compatible. Frax's approach is similar to Base, the layer-2 developed by Coinbase that gained significant attention in mid-2023. Fraxtal will also be a partner in Optimism's Superchain strategy.

Fraxtal aims to provide a platform with Ethereum-equivalent security, while offering higher transaction speeds and lower usage costs.

Positioned as the layer-2 solution for decentralized financial applications, Fraxtal will use Frax's frxETH token to pay transaction fees. The project also has ambitions to develop along the lines of modular blockchains like Celestia and Manta Network.

Fraxtal will use the FXTL points mechanism for activities on layer-2, including liquidity provision, smart contract and dapp interactions, and holding certain assets. The Frax website states that FXTL will be converted into tokens within 12 months of the layer-2 mainnet launch. The points mechanism follows a trend among many crypto projects preparing for token airdrops.

The project also announced that Fraxtal will be the first layer-2 to implement a blockspace reward mechanism called Flox, rewarding block creation. Smart contracts using certain dapps will earn FXTL points. Fraxtal claims this approach is superior to transaction fee-sharing programs used by other layer-2s, as it offers higher reward points.

FXTL Reward Mechanism

At 06:59 AM on March 7, 2024 (Vietnam time), Frax Finance will take a snapshot of veFXS token staking accounts to conduct the FXTL point airdrop. A week later, on March 14, Flox will start calculating FXTL points for layer-2 participants.

Currently, Fraxtal is only available to Frax's partners, including blockchain infrastructure providers like Safe wallet, Chainlink oracle, and bridges LayerZero and Axelar.

General users are expected to access Fraxtal in the coming days.

In an interview with CoinDesk in mid-January, Frax founder Sam Kazemian expressed hopes that the TVL (Total Value Locked) of the new layer-2 could reach nine figures in the first month, potentially ranking among the top 5 layer-2s by TVL.

The price of Frax Finance's FXS token has seen a slight increase following the news of the Fraxtal layer-2 launch.

FXS/USDT Chart on Binance

4-hour chart of the FXS/USDT pair on Binance as of 05:40 PM, February 8, 2024.