The Frax Finance Ecosystem offers a unique dual-token model for Ethereum staking that optimizes for both liquidity and yield. This guide provides a technical walkthrough of frxETH Liquid Staking and how to use the sfrxETH Staking Guide to earn rewards.
Core Concept: The Two-Token System
Understanding Frax Ether Explained is simple:
frxETH (Frax Ether): A liquid staking token that is loosely pegged to ETH. It acts as a stablecoin for the Frax ecosystem, representing your staked ETH. It does not automatically accrue yield.
sfrxETH (Staked Frax Ether): A yield-bearing token. You stake your frxETH into the sfrxETH vault to receive sfrxETH. All staking rewards from Frax's validators are directed to this vault, causing the value of sfrxETH to increase relative to frxETH.
Step 1: How to Stake with Frax (Minting frxETH)
Navigate to the official Frax application.
Connect your Web3 wallet.
Choose the "Stake" option for Frax Ether.
Enter the amount of ETH you wish to stake. You will receive an equivalent amount of frxETH in return.
Step 2: Staking frxETH for Yield (Minting sfrxETH)
Your frxETH is liquid, but to earn yield, you must complete the second step.
On the Frax app, go to the sfrxETH staking section.
Approve the contract to use your frxETH.
Enter the amount of frxETH you want to stake.
Confirm the transaction. Your frxETH will be deposited into the vault, and you will receive sfrxETH in your wallet. You are now earning passive staking rewards.
This two-step process allows for deep liquidity of frxETH for trading and lending, while sfrxETH serves as the primary investment vehicle. For a full breakdown of the architecture and the vision for Frax Finance Fraxchain, please see the Full Official Documentation.
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