An algorithmic stablecoin tied to U.S. consumer prices will be given to holders of cvxFXS, veFXS stakers, participants in the FXS liquidity pool and tFXS stakers.
Frax Finance is scheduled to distribute its latest stablecoin, the Frax Price Index (FPI), to holders and stakers of its various tokens – as long as they own one on Feb. 20th.
Frax says the FPI is an “inflation resistant” algorithmic stablecoin, designed to fluctuate in value in line with U.S. government-published consumer price index (CPI) data.
Data is sourced from the Bureau of Labor Statistics’ monthly inflation report, and is pushed to the blockchain by an Oracle provided by Chainlink.
An algorithmic stablecoin means that the value is derived from a constantly changing basket of underlying digital assets.
The FPI will be denominated in dollars, Frax Finance founder Sam Kazemian explained to CoinDesk in an interview, simply because they are a unit everyone is familiar with.
As an example, should inflation hold at 7%, by the end of the year the token will be worth $1.07
“We want to be a stablecoin protocol where we have a dollar stablecoin, as well as the successor to the dollar,” he said.
Eventually, holders of the governance token will be able to vote on the weighting of the basket of goods used by FPI to measure inflation and whether changes to the basket are required.
Frax hasn’t set a date for the airdrop. A snapshot will take place Feb. 20 to count the number of eligible wallets.
Kazemian may reveal more details during a talk at EthDenver, an industry event taking place Feb. 11-20, on Saturday.