Frax Lending Rates: Compare the Best (FRAX) AER in the UK

Earn AER on Frax of up to 4.5%. Compare rates and features across 2 platforms in the UK.

Last updated: 4 March 2025|Advertising disclosure

Frax Lending Guide in the UK

How to lend Frax in the UK

Cryptocurrency Lending Guide

Platform	Coin	AER
Aave	Frax (FRAX)	Up to 0.93% AER

Platform

Coin

AER

Aave

Frax (FRAX)

Up to 0.93% AER

Frequently Asked Questions About Lending Frax (FRAX) in the UK

What exactly is Legacy Frax Dollar (frax) and how does it differ from other stablecoins?

Legacy Frax Dollar (frax) is a stablecoin designed to maintain a near-$1 value. Unlike some stablecoins that are fully fiat-collateralized or fully algorithmic, frax aims for a hybrid approach, combining collateral backing with algorithmic stability mechanisms. This can offer a balance between price stability and capital efficiency. In practice, frax seeks to minimize a large over-collateralization while still providing reliable liquidity. You should monitor the project’s official disclosures for specifics on collateral mix, governance, and mint/burn mechanics as these can evolve over time.

How can I buy or trade frax, and which wallets or platforms support it?

To acquire frax, you can typically find it on major decentralized and centralized exchanges that list the token. Look for FRAX trading pairs such as FRAX/USD or FRAX/BTC on supported platforms. To store frax securely, use wallets that support ERC-20 tokens if frax is on Ethereum, or the corresponding chain if deployed elsewhere. Always ensure you’re interacting with the correct contract address and enable security features like hardware wallets and 2FA on exchange accounts. If you’re unsure, check official Frax Finance channels for the latest list of supported wallets and exchanges.

What is the current market status of frax in terms of price, supply, and volatility?

As of the latest data, frax trades near $0.993, reflecting a price deviation of a few tenths of a percent from $1. The circulating supply is around 276 million frax. Given its stablecoin nature, volatility is typically lower than that of volatile coins, but price can still move due to market demand, liquidity, and broader crypto conditions. Investors should monitor 24-hour price changes and liquidity pools to gauge short-term stability, while long-term investors may focus on collateral metrics, governance updates, and any changes to the stabilization mechanism.

What are the main risks and considerations when using legacy frax in DeFi?

Key considerations include counterparty risk on decentralized protocols, smart contract risk, and collateral sufficiency changes. If frax uses a hybrid model, shifts in collateral mix or governance decisions could impact stability or mint/burn dynamics. Liquidity risk in pools or on exchanges can cause slippage during large trades. Always review the latest risk disclosures, audit reports, and governance proposals from Frax Finance. Diversify across platforms when using frax in DeFi and consider setting price alerts to monitor deviations from $1.

How does frax maintain its peg, and what should users expect in terms of stability mechanisms?

Frax aims to maintain a near-$1 peg through a combination of collateral backing and algorithmic adjustments. The system can adjust minting and burning dynamics and may use collateral as a stabilizing force during demand shifts. Users should expect ongoing protocol updates and potential parameter changes as the team iterates the stabilizing algorithm. For practical use, check governance proposals and official documentation for the current peg maintenance approach, any collateralization targets, and how minting/recollateralization flows operate in various market conditions.

Frequently Asked Questions About Lending Frax (FRAX) in the UK