Frax USD

Frax USD receives a B- risk grade (31/100) from Hindenrank, where lower scores indicate lower risk. Frax USD represents a significant maturation of the Frax ecosystem, moving from controversial algorithmic mechanics to institutional-grade RWA backing. The multi-custodian model provides real diversification, and the BlackRock/Securitize partnership adds credibility. However, it's still a relatively new stablecoin design that hasn't been stress-tested in a major market crisis. Suitable for users comfortable with institutional counterparty risk. Frax USD (frxUSD) is a stablecoin pegged to the US dollar, backed by real-world assets held by institutional custodians like BlackRock (through its BUIDL fund), Superstate, and WisdomTree. It's the evolution of the original FRAX stablecoin, moving from algorithmic backing to full RWA backing. You can earn yield by depositing frxUSD into the sfrxUSD vault, which passes through returns from the underlying Treasury bills and repos.

The key risks identified for Frax USD are: (1) frxUSD depends on off-chain custodians (like BlackRock's BUIDL fund) to hold real reserves — if a custodian faces issues, redemptions could be delayed (2) Using frxUSD on chains other than Fraxtal requires trusting the FraxNet bridge, and bridge exploits are the most common large-scale DeFi hacks (3) The yield from sfrxUSD comes from US Treasury bills — if interest rates drop significantly, the yield advantage over competitors disappears

Frax USD scores 31/100 across eight risk dimensions: Mechanism Novelty: 5/15, Interaction Severity: 6/20, Oracle Surface: 2/10, Documentation Gaps: 2/10, Track Record: 2/15, Scale Exposure: 5/10, Regulatory Risk: 6/10, Vitality Risk: 3/10. The highest risk area is Regulatory Risk at 6/10.

Among 73 rated RWA protocols on Hindenrank, Frax USD ranks #13 by safety (lowest risk score = safest). Its 31/100 risk score and B- grade place it among the safer RWA protocols.

Frax USD scores 2/15 on the Track Record risk dimension, indicating some history of security incidents or exploits. Higher scores reflect more severe or frequent incidents. Review the full risk report for details.