Frax Ether (FRXETH)

Frax Ether (FRXETH) is a liquid staking derivative issued by the Frax Finance protocol on Ethereum, designed to track the value of ETH on a 1:1 basis. It is minted by depositing ETH into the frxETHMinter contract, which routes the deposited ETH to Frax-operated validators and mints an equivalent amount of frxETH in return, keeping the token’s supply matched to the ETH held in the system.

Unlike typical liquid staking tokens, frxETH itself does not accrue staking rewards while held or used in DeFi; instead, holders who want yield must stake it into sfrxETH, an ERC-4626 vault that captures validator rewards and increases in redemption value relative to frxETH over time. The majority of staking rewards earned by the underlying validators are passed to sfrxETH holders, with a smaller portion routed to the Frax treasury and a slashing insurance reserve to help keep the system backed. frxETH also serves as the native gas token on Fraxtal, Frax’s Ethereum Layer-2 network.