Decentralized finance (DeFi) protocol Frax Finance, home to one of the world’s largest stablecoins, is looking to roll out its layer 2 blockchain, Fraxtal, in February, CEO and founder Sam Kazemian told CoinDesk in an interview.
“The current timeline is the first week of February. Etherscan will support it on day 1 with Fraxscan, and a huge slew of projects will debut soon after launch. It will surely be one of the biggest rollup releases of the year,” Kazemian said.
The new offering will add to Frax’s existing product suite, which comprises FRAX, a fully collateralized algorithmic stablecoin, a lending platform, an automated market maker, an inflation-linked stablecoin, FPI, and the liquid staking token frxETH. As of the time of writing, FRAX has a market cap of $647 million, the seventh-largest stablecoin in the world, per CoinGecko.
The decentralized stablecoin-focused decentralized exchange Curve has already proposed to deploy its exchange functionalities on Fraxatal.
Layer 2 is a secondary framework or protocol built on top of an existing blockchain to address bottlenecks and improve transaction speed. The race to launch layer 2s gathered steam after Ethereum network congestion issues came to the fore during the bull market of 2021.
Fraxtal will use rollups technology, which executes transactions off the Ethereum mainnet, batches the data, compresses it, and sends it back to the mainnet. Frax\'s liquid staking token frxETH will power layer 2 and act as a gas for the chain. Gas in blockchain refers to the fee paid to execute a transaction.
Kazemian expects Fraxtal to debut with a bang, attracting at least several hundred million dollars worth of crypto assets in the first month.
“We expect at least a 9-figure total value locked in the first month and $1 billion plus for Q1. That should put us in the top 5 chains soon thereafter if our innovations are well received,” Kazemian said.
Kazemian added that Fraxtal’s blockspace incentives feature, called Flox, makes it stand out among other layer 2s. Blockspace refers to the limited amount of data that can be stored in each block on the blockchain. Users and developers using the chain and paying for the blockspace stand to earn a constant yield through the incentive program and the weekly FXTL point gauge system.