Frax Price Index Share PriceFPIS

What is Frax Price Index Share (FPIS)?

Frax Price Index Share (FPIS) is the governance token of the Frax Price Index (FPI) system, the second stablecoin launched by Frax Finance in April 2022. FPI is designed as the first stablecoin pegged to a basket of real-world consumer items as defined by the US CPI-U average, aiming to maintain its purchasing power through on-chain stability mechanisms. FPIS holders govern this system and are entitled to seigniorage generated by the protocol. The token has a maximum supply of 100,000,000 FPIS, with roughly 28.93 million tokens reported as circulating. FPIS is currently in a planned phase-out stage, set to be discontinued by March 22, 2028, after which it will be convertible to FXS or FRAX.

Key Specifications & Tokenomics

• Name: Frax Price Index Share
• Symbol / Ticker: FPIS
• Blockchain / Platform: Ethereum; also tagged with Ethereum Ecosystem and Arbitrum Ecosystem
• Category: Governance Token
• Launch Date: April 2022
• Max Supply: 100,000,000 FPIS
• Total Supply: 41.12M FPIS
• Circulating Supply: 28.93M FPIS
• Token Distribution: 30% Frax Finance Treasury, 25% FPI Protocol Treasury, 25% Core Developers & Contributors Treasury, 10% February 2022 Airdrop to FXS Holders, 10% veFPIS Emissions
• Official Website: https://app.frax.finance/
• Documentation: https://docs.frax.finance/frax-price-index/overview-cpi-peg-and-mechanics
• Explorer: etherscan.io
• CertiK Rating: 3.7
• Holders: 2.04K

Who created Frax Price Index Share?

Frax Price Index Share was created by Frax Finance, with Sam Kazemian identified as the founder. The project operates within the broader Frax Finance ecosystem and is closely interconnected with the Frax Share (FXS) token. Detailed public information about the extended core team beyond the founder is currently limited. The FPI system is maintained by the FPI Comptroller multisig, which manages surplus and deficit FRAX from the FPI Controller Pool, owns FPI-related contracts, and invests in income streams such as Curve and Convex farms to help add backing to the protocol.

How does Frax Price Index Share work?

FPIS functions as the governance token for the FPI system, which uses a CPI peg mechanism. FPI tracks the CPI-U unadjusted 12-month inflation rate reported by the US Federal Government. A specialised Chainlink oracle commits this data on-chain immediately after public release, and the reported inflation rate is applied to the redemption price of FPI stablecoins. This redemption price grows per second on-chain, or declines in rare deflationary cases, with the peg calculation rate updated every 30 days when bls.gov releases monthly CPI data. The contract handling the FPI peg price targeting is the CPI Tracker Oracle.

FPI uses the same type of AMO contracts as the FRAX stablecoin but is modelled to keep a 100% collateral ratio at all times. For the collateral ratio to stay at 100%, the protocol balance sheet must grow at least at the rate of CPI inflation, meaning AMO strategy contracts must earn a yield proportional to CPI. During times when AMO yield is under the CPI rate, a TWAMM AMO sells FPIS tokens for FRAX stablecoins to keep the CR at 100%. Minting of FPI using FRAX and redeeming FPI to receive FRAX can be done at any time for a small fee using the FPI Controller Pool. The Frax Collateral Ratio plays a crucial role in calculating value distribution to FPIS and veFPIS token holders.

What makes Frax Price Index Share unique and valuable?

FPIS derives its uniqueness from governing FPI, the first on-chain stablecoin designed to have its own unit of account derived from a basket of goods, both crypto and non-crypto. While FPI can be considered an inflation-resistant yield asset, its primary motivation is to create a new stablecoin to denominate transactions, value, and debt. Denominating DAO treasuries and measuring revenue in FPI, as well as benchmarking performance against an FPI trading pair, helps better gauge if value accrual is actively growing against inflation in real terms. This approach also helps ground on-chain economics to baskets of real-world assets.

FPIS is a linked governance token interconnected with the Frax Share (FXS) token, specifically tracking the growth of FPI, a token representing the protocol's own specific economy. FPIS tracks FPI growth similar to how a specific ERC20 token tracks growth of its own protocol rather than the entire L1 economy. As the protocol operates within the Frax ecosystem, FPIS also directs a variable portion of its revenue to FXS holders. The veFPIS system introduces a modular vesting and yield mechanism with a DeFi whitelist, enabling governance-approved smart contracts to add functionality such as liquidation contracts or novel yield-earning methods, all while maintaining a fully trustless staking system through opt-in user approvals.

What is Frax Price Index Share used for?

FPIS serves several core functions within the FPI system. It grants governance rights over the FPI stablecoin, particularly in managing its Consumer Price Index peg properties. By staking FPIS, users can convert it into veFPIS, which grants unique governance rights over the stablecoin's operations and adjustments to its peg mechanism. veFPIS holders can participate in voting on CPI gauge weights, borrow FPI, or control liquidity deployment. FPIS also entitles holders to a share of the seigniorage generated by the protocol. As the Frax ecosystem grows and generates excess yield, a portion of this yield is distributed to FPIS holders, similar to Frax Finance's FXS structure. Additionally, FPIS holders can lock their tokens to generate yield on Fraxswap.

How Is the Frax Price Index Share ecosystem developing?

FPIS is closely linked to the broader Frax Finance ecosystem, mirroring some aspects of the Frax Share token's structure, particularly in how it distributes excess yield from the treasury to token holders. FPI is the second stablecoin of the Frax Finance ecosystem, following FRAX, and is fully backed and crypto collateralised. FPI-related markets where users can buy or sell FPI include Curve and Fraxswap. The FPI Comptroller multisig actively invests in various income streams such as Curve and Convex farms and uses the proceeds to help add backing to the protocol. Related tokens in the ecosystem include FRAX, FXS, FPI, veFPIS, veFXS, cvxFXS, and tFXS.

The ecosystem has undergone significant structural changes. As part of a planned phase-out, veFPIS emissions were discontinued in early July 2024. Remaining FPIS tokens are held in the FPI Protocol Treasury multisig and are intended to be burned. FPIS is set to be phased out by March 22, 2028, and convertible thereafter to FXS according to Frax Finance documentation, or to FRAX according to IQ.wiki. Initially, the FPI treasury was comprised solely of FRAX but was designed to expand to include other crypto-native assets such as bridged BTC, ETH, and non-crypto consumer goods and services.

How to mine Frax Price Index Share?

FPIS is not mined through traditional proof-of-work or proof-of-stake consensus. Instead, tokens were initially distributed through a genesis event and airdrop. On February 20th, 2022, a snapshot for the FPIS airdrop took place, where all members of the community that were veFXS, cvxFXS, tFXS stakers and/or were FRAX-FXS liquidity providers before 11:59:59 UTC were eligible to claim free tokens. 10 million FPIS tokens were distributed to these FXS contributors based on their weight, claimable until August 20th, 2022. The amount received by each holder was determined by the formula: (individual weight * 10 million FPIS) / (total weight), ensuring proportional distribution.

Currently, users can acquire FPIS through market purchases or by providing liquidity. Staking FPIS converts it into veFPIS, with users able to lock their FPIS tokens for up to 4 years, receiving four times the amount of veFPIS in return. veFPIS is not transferable and does not trade on liquid markets; instead, it functions as an account-based point system representing the vesting duration of locked FPIS tokens. The balance of veFPIS gradually decreases as tokens approach their lock expiry, converging to a ratio of 1 veFPIS per 1 FPIS at zero lock time remaining. Frax Finance protocol allows FPIS holders to lock up FPIS tokens to generate yield on Fraxswap.

How to keep your Frax Price Index Share Coin safe?

Securing FPIS tokens requires attention to both custody and smart contract interactions. Because FPIS is an Ethereum-based token, storing it in a reputable self-custody wallet that supports ERC-20 assets is a fundamental step. Users should safeguard their private keys and seed phrases, never sharing them with anyone, and consider hardware wallets for long-term holdings. When interacting with the veFPIS staking system, users must individually approve each DeFi whitelisted contract in order to spend their FPIS tokens and unlock new functionality. This opt-in approach ensures a fully trustless staking system, where no additional logic can access a staker's veFPIS balance without their explicit approval.

Governance can introduce iterative enhancements to veFPIS staking, such as slashing conditions and novel ways to earn higher yield, allowing veFPIS holders to participate in voting on CPI gauge weights, borrow FPI, or control liquidity deployment. Before approving any contract, users should verify its authenticity through official Frax Finance documentation and governance proposals. Since veFPIS is non-transferable and account-based, users should also be aware that locked FPIS cannot be moved or traded until the vesting period concludes. Regular monitoring of protocol updates, including the planned phase-out by March 22, 2028, is advisable to understand conversion options and timelines.