According to Blockworks, blockchain Noble has formed a partnership with Frax Finance to introduce decentralized stablecoins FRAX and sFRAX into the Cosmos and IBC ecosystems. Other tokens from Frax Finance, such as the Frax Price Index (FPI) and FraxEther (frxETH), are expected to be available in the future. FRAX is a USD pegged stablecoin, maintaining a 1:1 value with the US dollar. Each stablecoin has a 100% collateralization ratio and uses Algorithmic Market Operations (AMO) contracts and non-custodial subprotocols to keep the peg to the dollar.
sFRAX is a staked version of the FRAX token. To receive this token, a user must lock their FRAX with a staking provider, allowing them to earn yield exposure on their stablecoins that would otherwise be sitting idle. As per DeFiLlama, FRAX is the eighth largest stablecoin based on market capitalization, with a market cap of $388.2 million. This is lower than popular stablecoins USDC and DAI, which have market caps of $32.116 billion and $4.881 billion, respectively.
Sam Kazemian, the founder of Frax Finance, stated that introducing native FRAX into the Cosmos ecosystem has been a priority for the team. He expressed excitement about the potential innovative use cases and incentives developed by Frax Finance, their partners, and the broader community of Cosmos appchains and users. This integration is facilitated by Noble, the digital asset issuance chain and the native asset issuer of USDC in the Cosmos ecosystem. Through Noble, all major Comos chains integrated with IBC, including Osmosis, dYdX, Celestia, Sei, Injective, and others, will have native access to FRAX and sFRAX. Noble founder Jelena Djuric expressed enthusiasm about the partnership with Frax Finance, stating that FRAX's integration supports Noble's vision of bringing liquidity, interoperability, and seamless UX, and allows Noble to provide more value to asset issuers and end users.