Frax Finance to Build Layer-2 Fraxchain

The goal of Frax Finance is to further decentralize the project by creating a layer-2 network optimized for DeFi activities and compatible with smart contracts.

Fraxchain's Unique Features
Fraxchain is expected to launch by the end of 2023. The new network will use the FXS token for governance, FRAX stablecoin, and Frax Ether (frxETH) for transaction fees. Additionally, a portion of the transaction fees on Fraxchain could be burned or redistributed to those staking FXS.

A key feature that sets Fraxchain apart is its approach to sequencers—the entities that organize transactions on layer-2 before sending them to the layer-1 mainnet. The community will elect these sequencers, ensuring a high degree of decentralization. Sam Kazemian, founder of Frax Finance, emphasized this point:

“Fraxchain will have a system in place for rotating sequencers, ensuring decentralization. If a sequencer goes offline, the next community-elected sequencer will take over seamlessly.”

Growing Trend of Layer-2 Solutions
The trend of building layer-2 solutions on Ethereum has been gaining momentum in 2023. Notable examples include Polygon zkEVM, zkSync Era, Linea, Scroll, and Taiko. Centralized exchanges such as Bybit, Coinbase, and OKX have also announced their layer-2 projects: Mantle, Base, and OKBChain, respectively. Additionally, some DeFi projects like Maker and Frax Finance have expressed intentions to develop their own layer-2 networks.

Market Reaction
The announcement of Fraxchain has positively impacted the price of the FXS token, which has seen a rise following the news.

What other features or innovations do you think Fraxchain might introduce to differentiate itself further from other layer-2 solutions?