Interview with Frax Finance: Fraxtal Will Be the Development Focus in 2024
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Interview with Frax Finance: Fraxtal Will Be the Development Focus in 2024
Fraxtal ETH v2 is also即将 launched in the continuation and development of Fraxtal, will be completely permissionless.
Navigating Web3 tides with focused insightsHost: Blair Zhu, Mint Ventures
Guest: Andy, The Director of Asia at Frax Finance
Interview Date: February 6, 2024
Original English Interview Link: WEB3 Founders Real Talk with Frax Recap
Andy's Background and Introduction to Frax
Blair: Hello everyone, welcome back to Web3 Founders Real Talk. We’re here to bring you an exciting conversation with leading figures in the Web3 industry. Today we're honored to have Andy, Director of Asia at Frax Finance. Welcome to the show, Andy.
Andy: Thank you, Blair. I'm glad to be here representing Frax.
Blair: Could you briefly introduce yourself and your project?
Andy: Sure. I’m Andy, currently serving as Director of Asia at Frax Finance. At Frax, I manage community relations, identify business development opportunities—especially across Asia—and participate in conferences and panels to promote Frax Finance’s vision of maximizing stablecoins. In short, Frax primarily focuses on stablecoins. We issue innovative decentralized stablecoins and have built sub-protocols that support them.
Blair: Impressive. I believe Frax is one of the most prominent DeFi protocols in the industry. Could you share some personal experiences about how you entered the crypto space?
Andy: It’s quite a story. Back then, I had no background in cryptocurrency or blockchain at all. I remember around 2016 or 2017, when I was in South Korea, Ripple hit $3—a historical high. My cousin told me, “You know what? This is the time to get in.” So I bought a large amount of Ripple at its peak price and still hold it today. Around that time, a friend asked me to work part-time translating and coordinating between a UK office and a Korean team. That’s how I started learning about crypto. The founder of Frax also launched a product called IQ Wiki, which is where I began. Actually, IQ Wiki existed before Frax—it focused on education and learning within the crypto and blockchain space. Over time, while working there, I gradually learned more and grew into this field. That’s how I got started. Later, I continued working with the team for several years because I truly believe they are among the best in the industry—smart, patient people who helped me learn deeply and become better.
Blair: Wow, fascinating. It sounds like you’ve experienced both speculation and education sides of the crypto world.
Andy: Exactly.
Comprehensive Product Line and Original Intentions
Blair: Let’s dive right in. As mentioned earlier, Frax has built a very comprehensive DeFi ecosystem atop stablecoins, covering a full range of products including liquidity systems, lending markets such as Fraxswap, Fraxlend, and liquid staking derivatives like Frax Ether. We’re curious what inspired your team to create such a diverse suite of DeFi protocols.
Andy: Great question. You mentioned many of our sub-protocols—there’s indeed a lot happening in our ecosystem. Fraxswap, Fraxlend, our LSD (Frax Ether), Frax Ferry, and others. Right now, we issue three different types of stablecoins, which drives the entire system. First is Frax itself—an asset pegged to the U.S. dollar. Then FPI, the Frax Price Index stablecoin—the first stablecoin tied to a basket of consumer goods, creating its own unit of account independent from any national currency.
As you noted, Frax Ether is an Ethereum-pegged stablecoin used as a wrapped ETH alternative within smart contracts. Around these core assets, we’ve built supporting sub-protocols to reinforce our stability mechanisms. Fraxswap is our native AMM and the first automated market maker with built-in time-weighted average purchase functionality. Fraxlend is a permissionless lending market.
Frax Ferry is the safest way to transfer and bridge Frax tokens—we’ll discuss that more later. But returning to your original question: we do this because by issuing these three distinct stablecoins and their supporting protocols, we believe that three dominant asset classes will shape the next wave of the industry. To elaborate: we see the U.S. dollar clearly maintaining dominance—that’s why we created Frax. Then there’s a need for flat coins linked to CPI-like indices—hence FPI. And finally, major blue-chip crypto assets like Bitcoin and Ethereum—this is why we launched Frax Ether. All our sub-protocols align with and support this overarching vision.
Challenges and Current Focus
Blair: Frax has been expanding across multiple verticals in DeFi with numerous products. That likely brings significant development and maintenance pressure. Has the team faced challenges? What are you currently focusing on?
Andy: On the development side, I don’t want to speak too much for our core dev team—but having worked closely with them, I can say they are builders through and through. I often get asked how we handle bear markets and tough conditions. Even for me, filtering out noise and ignoring negative narratives is hard. But seeing the dedication and consistent building from our core team is incredibly motivating. They focus on building excellent products so that when the next bull market arrives, a suite of impressive offerings will already be ready. Beyond development, it’s safe to say everyone in DeFi or crypto faces various challenges—like the frequent cross-chain bridge hacks last year, or stablecoin de-pegs. In fact, those bridge attacks taught us a lot and directly motivated the creation of Frax Ferry, our most secure method for bridging Frax assets. It may take longer than other bridges, but we prioritize user security over speed. We’re committed to learning from mistakes—both ours and those across the broader ecosystem.
Blair: Clearly, you’re bullish on stablecoins, hence developing stablecoin-driven DeFi infrastructure. Frax started with a single goal—stablecoins—then expanded into LSDs, and now Layer2. It’s a continuously growing, comprehensive ecosystem fueled by constant innovation. Managing such evolution requires sharp strategy, especially in this fast-moving space. There are always distractions—you must carefully choose which trends or products to pursue. Can you elaborate on how your team approaches observing developments, innovating, and pushing boundaries in the industry?
Andy: Our core team are builders who closely study other respected, crypto-native projects. We constantly look for ways to improve and learn from different initiatives. That’s how FRAX stays ahead—by focusing on positive narratives and collective progress rather than viewing others as competitors. This mindset is another reason I respect the team. Our ultimate vision is to become one of the top DeFi projects and lead in providing stable versions of the dominant assets I mentioned—something we believe will happen over the next decade. Returning to your question, our main current focus is Fraxtal. We aim to expand the vision of dominant assets by creating a chain that enables growth across the entire DeFi space. This will be something entirely new and unprecedented. We’re extremely excited to launch it—and interestingly, it’s launching very soon, just after this recording date.
Introduction to Fraxtal
Blair: You mentioned Fraxtal, which is our key topic today. I can feel the excitement building around its upcoming launch. Fraxtal is your latest name for Frax Chain, along with potential expansion into FRAX LSD—which I learned from your 2024 roadmap. Can you share more details about the product at this stage? You’ve touched on motivations behind building your own Layer2 solution, but are there additional insights? Also, could you give us a brief overview of its architecture and features? What should we expect?
Andy: Absolutely, happy to go deeper. As previously mentioned, Fraxtal represents the culmination of everything we’ve built—a kind of ultimate vision. Development-wise, we’re very close to official launch. We’ll make an announcement on February 7th, including snapshot activities related to Fraxtal points and airdrops. Briefly, Fraxtal will be a scalable general-purpose chain. Unlike app-specific chains (so-called “appchains”), it’s a fully functional tech stack with broader ambitions than most emerging appchains. One highlight is its optimized OP stack with superchain compatibility. While technical, this means Fraxtal starts as an optimized OP stack execution environment compatible with the superchain, enabling seamless deployment and development of dApps. Its long-term plan is to evolve into a foundational ZK L1.
Another feature is flexible gas tokens. We plan to use both FRAXETH and FRAX as gas tokens, unlocking value for both assets—with additional yield flowing to sFRAX and sFRAXETH holders. We’re also introducing split mining involving governance and gas. Although FRAXETH and FRAX will serve as gas tokens on Fraxtal, governance will remain in the hands of veFXS holders. We believe this separation is crucial for long-term growth: network profits flow back to veFXS, while increased usage drives more FRAXETH deposits into Fraxtal.
A particularly exciting feature is blockspace incentives—a novel reward structure that rewards users, apps, and developers using the network. Rewards will be paid in veFXS. So if you're a developer building a popular application on Fraxtal, you won’t just earn revenue—you’ll also receive blockspace incentives, boosting profitability and aligning your success with Fraxtal’s long-term growth. This is key for developers considering building on Fraxtal, as it incentivizes not only individuals but the entire ecosystem. Looking ahead, we also plan to launch special FXS gauges. Personally, I’m very excited about BAMM—have you heard of it? It stands for Borrowing Automated Market Maker. I believe this could be one of the most innovative DeFi advances in 2024. It will launch shortly after Fraxtal. Built on locked liquidity pools, it opens new avenues for lending and allows Fraxtal to leverage liquidity to support protocols. Very promising. One teaser: it may go live one to two months after Fraxtal’s official launch.
Strategies to Win Users and Developers
Blair: Sounds incredibly exciting. I’m eager to see all this come to life. FRAX Finance seems set for a prolific year. While I don’t mean to dampen the mood, my next question is about competition. As you said, there are already many scaling solutions like ZK and OP rollups, with new ones emerging constantly. Strategically, how does FRAX Finance plan to collaborate with the community to boost adoption? You've historically done well, but now with your own Layer2, you’ll need to compete for developers and users. Can you share specific initiatives to attract users and developers to the FRAX ecosystem?
Andy: I think FRAX Finance’s approach is purely about innovation and building. The core team thinks long-term—from three months to ten years or beyond. We constantly ask ourselves: what’s the next important metric? What will be the key stability mechanism in ten or twenty years? What will change, and what won’t? Starting from our stablecoin-centric view, we scan the space for fresh innovations and build upon them. As I mentioned, it’s not just about building—it’s about recognizing what’s happening across the industry. I think this genuinely attracts users, as we’re creating bold, unprecedented narratives without hiding our ambitions.
We hope other protocols can see and learn from us—as we do the same. For example, we’ve long admired and relied on Curve because we believe its stablecoin swap technology offers the ultimate minting and redemption function—something never seen before in crypto. We consider it the greatest, cleanest minting and redemption smart contract ever designed. Collaborating with truly crypto-native, innovative projects helps us grow. Again, this is a positive-sum game. I believe this drives adoption—not just retaining users, but attracting more to FRAX and, more importantly, strengthening the entire ecosystem and space.
Insights and Lessons Learned
Blair: Yes, I think everyone in this industry feels your team’s spirit—you’ve accumulated many users driven by this mission, all pursuing a shared goal. That’s why you attract so many participants and retain them within your ecosystem. It’s truly admirable. Your team is praised for exceptional delivery and product security. You mentioned risks in DeFi, but from my observation, your track record is outstanding. Can you share any insights or lessons? I don’t want to call out specific projects or events, but many founders have faced past challenges. Do you have advice for developers on managing high-quality delivery and product security?
Andy: As a stablecoin, FRAX places immense importance on stability mechanisms—I’ve probably mentioned this term multiple times already, but it’s a critical focus for all stablecoin projects. Having robust mechanisms supported by various protocols is something we’ve learned and evolved over the years. One cool thing we do is play a positive-sum game. As I said, we don’t see others as competitors—we love studying them, watching startups grow or established projects innovate. That’s where we gain insights. I hope other projects can learn from FRAX too—we keep building, innovating, and learning. For instance, in stability mechanisms, we once used partially algorithmic models, but after studying other projects, we shifted to a 100% reserve model. These kinds of decisions are what ground us in the space and help develop FRAX’s strength in security.
Blair: Sounds like your secret sauce is staying up-to-date—you conduct extensive analysis of other projects, not necessarily direct competitors, but comprehensive assessments based on trends, products, and innovations. You selectively adopt and apply them. Impressive—because as we said earlier, entrepreneurs must be strategic and selective in decision-making.
Andy: Yes, I think our team has its own ideas and roadmap, but observing, researching, and learning from others never hurts. I believe mutual support is vital in this space.
More Surprises in 2024
Blair: I agree. The whole industry is still nascent. With so many Bitcoin ETFs now, we’re pushing toward real-world utility—there’s no need to draw lines between “your work” and “my work.” Instead, we’re collectively building a broad community. I completely agree. Aside from that, what else can we look forward to in 2024? Anything else you’d like to share?
Andy: I think Fraxtal will be the main focus in 2024. Launching on February 7th isn’t the end—it’s just the beginning. We’ll keep upgrading and improving Fraxtal to higher levels. Additionally, there’s ongoing discussion in the community about FPIS—the governance token combining FPI and FXS—with rumors of a merger. So we might soon see snapshot proposals and debates, which will be exciting. And again, BAMM is really cool—I believe it will be game-changing. Also coming: Fraxtal ETH v2, which will be fully permissionless. Many things are underway, but I can say Fraxtal will dominate our 2024 agenda.
Blair: How do you manage such a heavy workload? It sounds like you might need a team of 100 to 200 people to cover all these areas.
Andy: That’s a great point. Our core team actually has fewer than 10 people. A small group of brilliant minds consistently delivers these amazing products—another reason I deeply respect them. Keeping the team lean helps maintain a unified vision and focus, avoiding dilution or distractions. It works well for Frax.
Vision and Strategy for FXS
Blair: Truly impressive! You must be highly focused and results-driven. Your CEO mentioned wanting FXS to rank among the top five crypto projects. Given the competitive landscape, that’s an ambitious goal. Can you share the origin of this vision and the concrete plans and strategies Frax Finance has to achieve it? You surely had a plan before setting such a bold target. Are you willing to share more about this grand ambition?
Andy: Sam is incredibly ambitious, rooted in confidence in what he’s built and the value created by the entire Frax team. I truly believe FXS will become a top-tier token in the industry. It’s not just talk—we’re actively working toward it, backed by a strong track record and major milestones already achieved. Regarding the strategy, I believe Fraxtal will be a key driver. We always say: everything leads to Frax. Everything flows back to the governance token FXS. That’s why we believe that after reaching 100% staking, all revenues from Fraxtal and associated protocols will return to FXS. Thus, FXS will become the core asset, exponentially growing under every new innovation launched by Frax and its ecosystem.
Views on Stablecoins and the Next DeFi Summer
Blair: That’s highly motivating. We look forward to that day—perhaps we’ll have another conversation then. Looking ahead, what are your thoughts on the core drivers of decentralized stablecoins? This is my final question, as you seem very bullish on stablecoins. In this market cycle, we’re seeing emerging trends like memes and DePIN—there’s always something new. What’s your take on demand for decentralized stablecoins and the next DeFi cycle? How do you think these factors will shape the future? Some say DeFi may not lead us into another DeFi Summer—what’s your view on such speculation?
Andy: Everyone has the right to their opinion. Personally, I’m confident another DeFi Summer will come—just as we had an LSD Summer this year. I believe DeFi and stablecoins are here to stay. I know stablecoins went through a turbulent rollercoaster last year, but now we have enough evidence showing they’ll endure. This belief stems from our "stablecoin supremacy" thesis—the idea that most crypto protocols will eventually converge toward becoming stablecoins or relying heavily on stablecoin mechanics. Given enough time and scale, everything gradually converges toward some form of stablecoin. We’re already seeing many projects—both Web2 and Web3—launching their own stablecoins with varying mechanisms. It’s fascinating and gives us continuous insight: what’s working, what’s not, and what we can learn. Therefore, based on this stablecoin-centric worldview, we believe the sector will only grow, not disappear. I truly believe we’ll see a DeFi or stablecoin summer. That’s my personal conviction—I genuinely believe it.
Blair: Hopefully we’ll witness that day. Indeed, stablecoins are a core use case for the entire Web3 industry. As you said, many other major players have entered the space, validating your theory and the domain. Thank you so much for all your insights. Thanks for discussing this with us before the Fraxtal launch. Wishing you all the best—we’ll be watching closely. Thank you, Andy.
Andy: Thank you for having me. I’m honored to represent Frax here and discuss with you. Thank you.
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