Recently spent time researching the FRAX project and discovered some interesting details. Many people treat it as a governance token for speculation, but in reality, the core goal of this project is not that—what they truly want to do is create a stablecoin, aiming for a 1:1 peg to the US dollar.

To be honest, this direction is a bit overly ambitious. It’s important to note that the stablecoin sector is already a red ocean, with the competitive landscape essentially settled from USDC to USDT and others. FRAX’s current state is somewhat awkward, still in transition, and has not fully switched to operating as a stablecoin.

But here’s a key point—once the project officially announces the switch, market reactions could be very direct. By then, FRAX’s price expectations will inevitably be recalibrated, gradually returning to the 1:1 peg to the dollar. This is not a sudden event, but an inevitable result dictated by the mechanism.

So if you are still treating it as a regular governance token for your positions, you might need to reassess your logic.