Exploring the Ethereum Layer2 network Fraxchain

Exploring Ethereum's Layer2 network, Fraxchain.

Frax Finance has launched the Ethereum Layer2 network Fraxchain, aimed at providing more utility for FRAX, frxETH, and FXS, and plans to implement a decentralized sequencer. Cryptocurrency researcher Nikyous tweeted about the main features of Fraxchain and the impact and changes its launch will bring to the L2 space.

Fraxchain is a Layer 2 rollup chain that leverages the security of the Ethereum mainnet and emphasizes decentralized finance. It is expected to be completed by the end of this year. Governance of Fraxchain will be led by FXS token holders and transaction fees will be paid using FRXETH, FRAX stablecoin, and SFRXETH. Generated fees can be partially burned or distributed to FXS token holders. Fraxchain utilizes a hybrid rollup consisting of Optimistic rollup and zero-knowledge proofs, which will enable faster transaction finality and decentralized sequencer functionality, distinguishing it from other L2 solutions on Ethereum that rely on a single sequencer.

Fraxchain may choose to implement EIP-1559. This means fees can be burned and value can accrue to veFXS holders. VeFXS holders can also choose to introduce a bribe market for the sequencer. Additionally, sequencer roles can be auctioned and rotated, creating a decentralized sequencer base. With approximately 228,000 ETH staked, FRAX ranks as the fourth largest LSD by TVL, implying a TVL of approximately $3.92 billion. Fraxchain will provide a use case for all frxETH and serve as another source of yield. With a market capitalization of $390 million, FDV of $537 million, and total TVL of $759 million, most tokens are in circulation, there are no large token unlocks, and inflation is relatively low, making it suitable for long-term holding.

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Reference: https://twitter.com/CryptoNikyous/status/1671171494809042948

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