Founder Participates in GENIUS Act, FXS Price Doubles Within a Month
Written by: Alex Liu, Foresight News
Stablecoin Legislation and FXS
On May 20, the U.S. stablecoin legislative bill, the GENIUS Act, passed a Senate vote, with only a House vote and presidential signature remaining before becoming official. The market previously believed the Senate vote was the biggest obstacle, and barring any unexpected developments, the bill's complete passage is likely just a matter of time.
Which crypto project is the biggest winner of this legislative victory? Looking at token price performance, it might be Frax Finance.
With the bill passing in the Senate, Frax Finance's token FXS (currently renamed to FRAX, not yet updated on centralized exchanges) briefly rose above 4.4 USDT, topping the gainers list on major exchanges. Even with a slight price pullback, the monthly gain for FXS still exceeds 100%.
Why is this bill favorable to Frax Finance, and why are some considering Frax the biggest winner of the GENIUS Act?
Frax Finance
Frax Finance's products are not just stablecoins, but also include liquidity staking, lending, L2, and more. However, they have a deep connection to stablecoins. Frax was once the issuer of the hybrid algorithmic stablecoin FRAX, but after the Luna UST collapse, they abandoned the "algo-stables" track and transitioned to a fully collateralized stablecoin.
Subsequently, FRAX was further updated to frxUSD, collateralized by fiat currency, with the "entire roadmap aimed at becoming the first licensed fiat currency stablecoin".
Frax Founder Sam Hints Frax Benefits Most from the Bill
But how can frxUSD become the "first" licensed fiat currency stablecoin ahead of products like USDC and USDY? In terms of regulation, it indeed has a "first-mover advantage".
Frax Finance founder Sam Kazemian has frequently shared photos of himself with crypto legislative figures in Washington D.C. since the beginning of this year. He is reportedly deeply involved in the discussion and drafting of the GENIUS Act as an industry insider. The market seems to be pricing in the potential regulatory advantage for Frax Finance.
Sam with Crypto-Friendly Senator Lummis
If this speculation is true, as a drafter and participant of the bill, Sam naturally has a deeper understanding of the GENIUS Act and can more easily ensure his project meets the requirements. Additionally, friendly relationships with legislators might open a regulatory green light for FRAX's future.
FRAX's Future Roadmap
Besides potential regulatory advantages, FRAX is building a vertically integrated stablecoin ecosystem, including frxUSD (stablecoin), FraxNet (banking interface), and Fraxtal (L2 execution layer) to adapt to future regulatory environment needs:
- frxUSD: A stablecoin pegged 1:1 to the U.S. dollar.
- FraxNet: A banking interface aimed at connecting traditional finance with DeFi.
- Fraxtal: An L2 execution layer (potentially moving towards L1), providing efficient transactions and scalability.
Token restructuring is also part of FRAX's future plans. FXS has been renamed to FRAX and given functions such as gas, governance, burning, and staking. This adjustment aims to enhance FRAX's functionality and market competitiveness, making its operations more flexible in a compliant environment.
Staking FRAX for veFRAX can potentially earn rewards like FXTL (Frax's own points), Karak, Ethena, and Symbiotic points.
With the founder actively participating in stablecoin-related legislation and proactively adjusting the product roadmap to serve the narrative, the performance of FXS (FRAX) is worth further anticipation as the GENIUS Act is further implemented.
