Key Takeaways

• The news that Frax Finance is launching its own Layer 2 Scaling Solution this year has boosted the price of Frax Share (FXS).
• Frax Share helps support the Frax stablecoin.
• Can FXS break through and recover to the levels it enjoyed in April 2022?

The Frax Share collateral token has performed well lately, boosted by the news  that its parent organization, Frax Finance, would launch its own Layer 2 Scaling Solution, tentatively called Fraxchain, by the end of 2023. .

The FXS crypto has taken a hit over the last year or so, as algorithmic stablecoins have become something of a sector to avoid in the wake of the Terra collapse.

However, Frax’s holders will be hoping that it can spearhead a renaissance in the field. 

But what is Frax Share (FXS)? How does Frax Share work? Let’s see what we can find out, and also take a look at some of the Frax Share Price Predictions that were being made as of 7 July 2023.

Frax Share (FXS) Explained

Frax Finance  is a platform designed to support the Frax stablecoin. Because Frax aims to stand at $1 all the time, it needs some help in doing so. 

The Frax Share crypto, also known by its ticker handle FXS, is minted if Frax moves above the dollar, while it is burned, or destroyed, when Frax falls below $1.

Frax Finance was launched in 2020 by computer programmer Sam Kazemian and former Donald Trump adviser Stephen Moore. 

How Frax Share Works

As we have already said, Frax Share is used to help the Frax stablecoin maintain parity with the dollar. Something that makes Frax a little bit different from other stablecoins is that it does not necessarily need to be worth exactly $1 for it to be exchanged for a dollar. This means that, at least in theory, people can gain arbitrage opportunities from trading Frax.

If the way in which Frax works seems familiar, it is because it is an algorithmic stablecoin, with Frax Share serving as its collateral token. This means it operates in a similar way to the ill-fated USD stablecoin and the doomed Terra coin. 

As well as supporting the price of Frax, FXS gives its holders the right to vote on changes to the network, and it can be bought, sold, and traded on exchanges. 

It is worth pointing out that, because FXS is based on the Ethereum (ETH) blockchain, it is a token, not a coin. You might see references to such things as a Frax Share coin price prediction, but these are wrong.

FXS Price History

Let’s now take a look at some of the highlights and lowlights of the Frax Share price history . While past performance should never be taken as an indicator of future results, knowing what the token has done can help give us some very useful context when it comes to either making or interpreting a Frax Share price prediction. 

FXS first came onto the open market in late December 2020, when it was worth about $3.90. When the crypto market flourished in early 2021, FXS did well, peaking at above $25 in January, but then sliding down, only to make a comeback later on in the year, which it closed at $39.04.

The news that Terra was launching a crypto pool that featured the Frax stablecoin saw it reach new heights and, on 3 April 2022, it traded at an all-time high of $42.67. 

Unfortunately, Terra collapsed the following month and FXS was left stunned, dropping below $10 in May. The token spent much of the rest of the year being largely unimpressive, and it closed 2022 at $4.14, an annual loss of nearly 90%.

So far, Frax Share’s 2023 has been characterized by a good start before a largely unimpressive middle.

FXS went above $10 in January on its way to a peak of $14.09 on 9 February. The token then dropped down. When the market slumped in June following the United States Securities and Exchange Commission (SEC) announcing it was suing the Binance and Coinbase exchanges, FXS fell to $4.61 on 15 June. 

Frax Share has since made something of a recovery and, on 7 July 2023, it was worth about $6.40. At that time, there were about 72 million FXS in circulation out of a total supply of a little more than 99 million. This gave the token a market cap of around $463 million, making it the 82nd-largest crypto by that metric. 

Frax Share Price Analysis

Frax Share has been through a tough time over the last few weeks. Before the SEC said it was suing Binance on 5 June, the token was trading at $6.68, which meant it dropped more than 30% in 10 days. 

Since then, it has recovered by around 40%, but it is still down more than 4% from where it was before the crash.

Frax Share Price Prediction 

With that all out of the way, let’s take a look at some of the Frax Share price predictions that were being made as of 7 July 2023.

It is important to remember that price forecasts, especially for something as potentially volatile as crypto, very often end up being wrong. Also, keep in mind that many longer-term crypto price predictions are made using an algorithm, which means that they can change at a moment’s notice. 

First, CoinCodex  made a short-term Frax Share price prediction which said the token would drop to $4.85 on 12 July before recovering to $9 on 7 August. The site’s technical analysis was neutral, with 15 indicators sending bullish signals and 11 making bearish ones. 

Frax Share Forecast for 2023

When it came to other sites Frax Share price predictions for 2023, DigitalCoinPrice  said it would be worth $13.54 and PricePrediction.net  had it at $7.76. Bitnation , meanwhile, said it would reach $9.57 this year. 

Frax Share Forecast for 2025

Moving onto a Frax Share price prediction for 2025, Bitnation thought the token would trade at $22.33, while DigitalCoinPrice argued it would reach $21.61. PricePrediction.net was more cautious, saying it would get to $16.07 in two years time. 

Frax Share Forecast for 2030

Looking forward to a more long-term Frax Share price prediction for 2030, PricePrediction.net said it would break through the $100 barrier to trade at $121.54, whereas DigitalCoinPrice had it at $64.51. Bitnation, on the other hand, made a FXS price prediction that had it worth $54.23 at the start of the next decade.

Is Frax Share a Good Investment?

It is hard to tell. While the news that it is to create its own Layer 2 Scaling Solution – not to be confused with an actual blockchain – does mean that the people behind Frax Share are in the business of trying to grow their network, there are still concerns.

Some decent recent price behavior does not mean that the token is out of the woods yet. With the current state of crypto triggered, at least in part, by the collapse of the UST algorithmic stablecoin, you would not be too surprised if thoughtful investors gave that entire sector a wide berth.

As ever with crypto, you will need to make sure you do your own research before deciding whether or not to invest in FXS.

Will Frax Share go up or down?

No one can really tell right now. While the Frax Share crypto price predictions are largely positive, price predictions have a well-earned reputation for being wrong. Keep in mind, too, that prices can, and do, go down as well as up. 

Should I invest in Frax Share?

Before you decide whether or not to invest in Frax Share, you will have to do your own research, not only on FXS, but on other, related, coins and tokens such as Terra Classic (LUNC). Either way, you will also need to make sure that you never invest more money than you can afford to lose.

FAQs 

How many Frax Share are there?

On 7 July 2023, there were about 72 million FXS in circulation out of a total supply of a little more than 99 million.

Will Frax Share reach $100?

It might do, but not for some time. PricePrediction.net says it will reach three figures in 2030, while DigitalCoinPrice thinks it will reach that level in 2032.

Keep in mind that FXS’ highest ever price, which came in April 2022, was $42.67. 

What is Frax Share used for?

The Frax Share (FXS) token is used to support the Frax stablecoin. Holders can vote on changes to the Frax Finance platform, and it can be bought, sold, and traded on exchanges. 

Disclaimer 

Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.