Frax USD (frxUSD)

Rejected venues wait the longest for re-review; a rejection has to earn another look before the scheduled date.

REJECTED, CORRECTING A JOIN-KEY GAP IN THIS REGISTRY’S OWN COVERAGE. This registry’s existing ”frax” entry (project id `frax`) is joined to DefiLlama’s legacy algorithmic FRAX record — a mostly dormant, UST-depeg-era product now carrying roughly $44M of TVL — not to the live, custodian-backed frxUSD product DefiLlama actually tracks under the separate `frax-usd` slug, currently around $111M of TVL. Per this registry’s own rule that a chain or project id must match the feed’s string exactly or a rejection silently no-ops, that means the existing ”frax” rejection has not been matching live frxUSD pool data at all. This entry closes that gap under the correct join key. On the merits, the underlying findings are the same ones already established for frxUSD: it is minted and redeemed against a fragmented set of six ”enshrined” custodians (including BlackRock’s BUIDL, itself already rejected in this registry) rather than a single unified reserve; no reproducible, dated, line-by-line reserve report was located; and the contract’s freeze and blacklist authority reportedly carries no enforced timelock, meaning an admin action could execute without delay. sfrxUSD, the separate yield-bearing wrapper with a rotating-collateral strategy, remains a distinct and separately rejected risk under the existing ”frax” entry’s reasoning.

Kill criteria: the events that revoke this verdict
• A reproducible, dated, line-by-line reserve report covering every enshrined custodian and any encumbrances is published
• The freeze and blacklist admin function is placed behind an enforced timelock
• The reserve composition sheds dependency on any custodian this registry has independently rejected, or those custodians clear their own rejections
• This registry’s existing ”frax” entry is reconciled with this one so the two project ids do not present conflicting guidance on the same underlying frxUSD/sfrxUSD product family

The research file

The join-key finding

DefiLlama’s `frax-usd` protocol record (category RWA, tag ”Treasury Bills”) describes itself verbatim as ”Frax USD (frxUSD)… a fully collateralized stablecoin issued by Frax Finance, combining off-chain custodians holding cash-equivalent reserves with on-chain minting and redemption mechanisms” — the live, current product. DefiLlama’s separate `frax` slug is a structurally different, largely dormant product: the legacy algorithmic FRAX stablecoin, AMO/Curve-collateral-based, associated with the May 2022 UST depeg era, currently around $44M of TVL and shrinking. This registry’s existing ”frax” memo cites frxUSD-specific sources (docs.frax.com/protocol/assets/frxusd) but is keyed to the wrong DefiLlama slug — exactly the silent-no-op failure mode this registry’s own rules warn against for chain ids, here found in the project id instead.

Mechanism and custodian fragmentation

frxUSD launched January 2025 as the RWA-backed successor to legacy FRAX, minted and redeemed by governance-approved ”enshrined custodians” holding cash-equivalent reserves: BlackRock BUIDL via Securitize, Superstate USTB and USCC, Circle USDC, Agora AUSD, Centrifuge JTRSY, and WisdomTree WTGXX. That includes BUIDL, already rejected in this registry on access grounds, and JTRSY, already rejected as Anemoy Capital — meaning frxUSD’s reserve composition directly inherits risk this registry has already independently found disqualifying in two of its six named custodians.

Legal structure and control

Compliance and collateral-management responsibility sits with FRAX Inc (formerly Financial Reserves and Asset Exploration Inc), a Delaware public benefit corporation, per Frax Improvement Proposal 432. frxUSD contracts include admin functions to freeze or blacklist addresses and halt transfers, controlled by a multisig reportedly held by the core team and compliance entity, comparable in kind to USDC and USDT’s freeze design — but one secondary source states frxUSD’s admin functions currently carry no enforced timelock, meaning a freeze or upgrade action could execute without any delay for holders to react.

Redemption and reserve transparency

Redemption runs through the enshrined custodian network per Frax’s own documentation; sfrxUSD, the separate ERC-4626 yield-bearing wrapper, redeems into frxUSD with no stated unstaking fee. No reproducible, dated, line-by-line reserve report showing custodian-by-custodian balances and any encumbrances was located in this or the prior research pass underlying the existing ”frax” entry — this gap is independently confirmed, not resolved, by this review. An independent token review (Chaos Labs) characterizes the design as solvency-focused overall but flags redemption-pathway and exit-liquidity depth as areas still needing improvement.

sfrxUSD and comparison

sfrxUSD’s ”Benchmark Yield Strategy” can rotate collateral among Ethena carry trades, DeFi AMO positions (Aave, Curve, Convex, Fraxlend, dTrinity), and Treasury/IORB strategies — a materially different and more actively managed risk than simply holding frxUSD, and remains covered by this registry’s existing ”frax” entry’s separate rejection of that risk; this entry does not duplicate that reasoning, it corrects the join key for the base frxUSD product only. Against USDC and USDT, frxUSD shares a comparable freeze-and-blacklist control pattern but with a more fragmented six-custodian reserve set and no comparably frequent, comparably independent public attestation cadence.

Sources

The claims above trace to these. Where a number could not be independently verified, the thesis says so.

• DefiLlama — frax-usd protocol data · secondary · accessed 2026-08-17
  Supports: live frxUSD TVL, category and tag confirming this is the current custodian-backed product
• DefiLlama — frax (legacy) protocol data · secondary · accessed 2026-08-17
  Supports: legacy algorithmic FRAX TVL, confirms distinct, mostly dormant product under the existing registry project id
• Frax documentation — frxUSD asset overview · primary · accessed 2026-08-17
  Supports: enshrined custodian list, mechanism description
• Frax governance — FIP-432, transfer of compliance and collateral management to Frax Inc · primary · accessed 2026-08-17
  Supports: Frax Inc Delaware public benefit corporation, compliance authority
• Chaos Labs — frxUSD token review · secondary · accessed 2026-08-17
  Supports: redemption pathway and exit liquidity assessment

Inherited controls

The verdict above grades the protocol layer. Every position also inherits the asset it holds and the chain it settles on. The least safe layer sets the position’s grade, and the position table names which one that is.