Frax Ether

Fraxtal is a Layer 2 blockchain built on top of Ethereum, developed by Frax Finance. It is a modular rollup based on the OP Stack, designed to provide an EVM-equivalent environment for deploying smart contracts using familiar Ethereum tooling. The network supports fast, low-cost, and secure application deployment, while introducing new mechanisms to incentivise participation and network usage.

Fraxtal is structured for scalability through a roadmap referred to as “fractal scaling.” This architecture enables recursive infrastructure development, allowing the network to support Layer 3 chains and other modular components. In addition to standard rollup functionality, Fraxtal uses a custom data availability module developed by the Frax team, enabling alternative configurations beyond those of existing OP Stack-based rollups.

A core feature of Fraxtal is its blockspace incentive system called Flox. Flox is designed to reward both users (EOAs) and smart contract developers based on on-chain activity. Every epoch, gas usage is analysed and ranked via a dynamic algorithm known as Flox Rank, which determines the allocation of FXTL points. These points function as a reward system for interacting with the chain, and can later be converted into tokens. The model is designed to allocate rewards exceeding the value of gas spent, distinguishing it from typical fee-sharing programmes. Flox also includes farming mechanisms, quests, and a referral system to further support network growth and user engagement.

Frax Ether (frxETH) is the native token of the Fraxtal network. It was initially introduced by Frax Finance as a liquid staking derivative on Ethereum. On Fraxtal, frxETH functions as the primary medium of exchange and is used to pay transaction fees. It operates as the chain’s native gas token, replacing ETH in all transaction contexts.

frxETH retains its ERC-20 format, allowing seamless bridging between Ethereum and Fraxtal. Through the native Fraxtal bridge, users can deposit ETH or ERC-20 frxETH from Ethereum and receive frxETH on Fraxtal for use within the L2 environment.

On Fraxtal, frxETH is used as the native gas token. All transactions, contract deployments, and smart contract interactions require frxETH to cover gas fees. It also underpins the blockspace incentive system, as gas expenditure is tracked to calculate FXTL rewards for both EOAs and smart contracts.

Outside Fraxtal, frxETH continues to serve as a liquid staking derivative on Ethereum. Users can deposit it into a dedicated vault to convert it into sfrxETH, a yield-bearing version that accumulates staking rewards from the Frax validator set. This dual functionality allows frxETH to operate simultaneously as an Ethereum-based staking token and a blockchain-native currency on Fraxtal.