Cryptocurrency Q&A
What is the difference between FRAX and Lusd?
What is the difference between FRAX and Lusd?
CryptoKing
Thu Jun 27 2024
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6 answers
1552
Could you elaborate on the key differences between FRAX and Lusd in the realm of cryptocurrency? FRAX, as I understand, is a fractional-algorithmic stablecoin designed to maintain a pegged value through a combination of algorithmic expansion and collateralization. On the other hand, Lusd seems to be a decentralized stablecoin backed by a basket of assets. What are the fundamental distinctions in their underlying mechanisms, collateralization strategies, and potential risks? Additionally, how do they compare in terms of liquidity, adoption, and overall market performance?
6 answers
GyeongjuGloryDaysFestival
Sat Jun 29 2024
The decentralization ratio of FRAX stands at 22.5%, indicating a heavy reliance on censorable assets as its collateral backing.
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HallyuHeroine
Fri Jun 28 2024
This decentralization level surpasses that of other stablecoins such as LUSD and DAI, which have significantly higher ratios.
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Pietro
Fri Jun 28 2024
This could pose risks for investors seeking stability and security in their digital assets.
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Daniele
Fri Jun 28 2024
LUSD, for instance, boasts a 100% decentralization ratio, meaning it is fully backed by ETH.
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CryptoLord
Fri Jun 28 2024
DAI, on the other hand, maintains a 33% decentralization ratio, still significantly higher than FRAX's 22.5%.
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