Original author: Alex Liu, Foresight News
Stablecoin Act and FXS
On May 20, the US stablecoin legislation bill "GENIUS Act" passed in the Senate vote. There are still two major steps to go before it is officially passed: the House of Representatives vote and the submission to the President for signature. The market previously believed that the Senate vote was the biggest obstacle to the passage of the bill. If nothing unexpected happens, the complete passage of the bill will only be a matter of time.
Which crypto project is the biggest winner of this legislative victory? Judging from the token price performance, it may be Frax Finance.
As the bill passed the Senate, Frax Finance token FXS (now renamed FRAX, not yet updated in centralized exchanges) once rose above 4.4 USDT, ranking first in the list of mainstream exchanges. Even if the price has slightly adjusted, in the long run, FXS still rose by more than 100% within the month.
Why is this bill good for Frax Finance, and why is Frax considered by some to be the biggest winner of the GENIUS Act?
Frax Finance
Frax Finance's products are not just stablecoins, but also include liquidity pledge, lending, L2, etc. But they have a deep connection with stablecoins. Frax was once the issuer of the hybrid algorithmic stablecoin FRAX, but after the Luna UST crash, it gave up the "calculated stability" track and transformed into a fully collateralized stablecoin.
Since then, FRAX has been further updated to frxUSD, which is collateralized by fiat currency, and "the entire roadmap is to become the first licensed fiat currency stablecoin."
Frax founder Sam hints that Frax would benefit the most from the bill
But how did frxUSD become the "first" licensed legal currency stablecoin before USDC, USDY and other products? In terms of supervision, it is possible that it is "the first to get the moon".
Sam Kazemian, the founder of Frax Finance, has frequently posted photos of himself with crypto legislators in Washington, the capital of the United States, since the beginning of this year. It is said that as an industry insider, he was deeply involved in the discussion and drafting of the GENIUS Act. The market seems to be pricing in the regulatory advantage that Frax Finance will have based on this.
Sam took a photo with crypto-friendly Senator Lummis
If the speculation is true, as the drafter and participant of the bill, Sam naturally has a deeper understanding of the GENIUS Act and is more likely to make his own projects meet the requirements. In addition, it is unknown whether the friendly relationship with legislators will open the regulatory green light for the future of FRAX.
FRAX’s future path
In addition to potential regulatory head start, FRAX is building a vertically integrated stablecoin ecosystem, including frxUSD (stablecoin), FraxNet (bank interface) and Fraxtal (L2 execution layer), to adapt to the needs of the future regulatory environment:
frxUSD: As the stablecoin of FRAX, it is anchored to the US dollar at a 1:1 ratio.
FraxNet: A banking interface designed to connect traditional financial systems with DeFi.
Fraxtal: A L2 execution layer (or will gradually move towards L1) that provides efficient transactions and scalability.
Token reorganization is also part of FRAX's future plan. FXS has been renamed FRAX and given functions such as gas, governance, burning and staking. This adjustment is aimed at enhancing FRAX's functionality and market competitiveness, making it more flexible in operating in a compliant environment.
And staking FRAX as veFRAX can get potential rewards such as FXTL (Frax’s own points), Karak, Ethena, and Symbiotic points.
The founder actively participated in the legislation related to stablecoins, and actively adjusted its own product roadmap to serve the narrative. With the further implementation of the GENIUS Act, the performance of FXS (FRAX) is worth looking forward to.
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