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Frax Finance holds a vote to choose a reserve asset for the Frax USD stablecoin
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DeFi protocol Frax Finance will launch its new stablecoin, Frax USD (frxUSD). First, however, the community must vote and decide what will be the reserve asset of the token. The options are BUIDL (BlackRock USD Institutional Digital Liquidity Fund) or USCC Fund (USD Superstate Crypto Carry). To participate, interested parties must be owners of FSX, the project’s token.
Voting began on the 26th and runs until January 1st, 2025. After 24 hours of voting, the BUIDL remains ahead with around 2.8 million votes. Meanwhile, the USCC has only 591,500 votes.
The management of BUIDL is from BlackRockone of the largest and most traditional asset managers in the world. It is a tokenized fund that invests 100% of its assets in cash, US Treasury bills and other instruments guaranteed by the US government.
The fund tracking mechanism ensures that each unit of Frax USD is backed by a safe and liquid assetwhich, in the case of BUILD, is a tokenized version of US Treasury bonds and other financial instruments guaranteed by the US government.
Frax Finance stablecoin reserve options: BUIDL
By backing your tokens to the fund, the Frax Finance ensures that the stablecoin maintains a stable value, usually around $1. After all, there are always real assets backing each issued token.
Launched in March 2024, the BUIDL quickly reached over $500 million in assets under management.
Among the advantages cited in the fund proposal are the income generation, variety of options for transferring incomeand partnership with renowned institutions in the financial sector, Securitize Markets and Bank of New York Mellonthe largest depository bank in the world with around US$1.7 trillion under management.
The USCC (Superstate Crypto Carry Fund) is a fund tokenized currency that merges the use of digital and traditional assets to provide secure reserves for stablecoins such as Frax USD (frxUSD).
Like the BlackRock fund, the USCC uses an tokenization that allows assets underlying assets are represented digitally, facilitating the tracking and stability of the token with the fiat equivalent.
The difference, however, is in relation to the type of assets backed. In the USCC, frxUSD tokens will be backed by other digital assets such as Bitcoin and Etherin addition to US Treasury bonds.
Frax Finance holds a vote to choose a reserve asset for the Frax USD stablecoin
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Frax Finance holds a vote to choose a reserve asset for the Frax USD stablecoin
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Frax Finance holds a vote to choose a reserve asset for the Frax USD stablecoin
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Frax Finance holds a vote to choose a reserve asset for the Frax USD stablecoin
