What is FRAX payment?

FRAX payment refers to transactions conducted using the FRAX stablecoin, which is part of the Frax Finance ecosystem. FRAX is a stablecoin that maintains its value pegged to 1 US Dollar through a unique algorithmic mechanism that combines collateralization with supply adjustments.

Businesses can accept FRAX as a payment method to enjoy the benefits of stable, low-volatility cryptocurrency transactions without being exposed to the price fluctuations associated with traditional cryptocurrencies like Bitcoin or Ethereum.

How does FRAX payment gateway work?

1

Set Up FRAX Payments for Your Business

‍Calypso Pay provides a comprehensive payment gateway API, allowing you to easily add FRAX and other crypto payment options to your website or platform.

2

Customer Selects to Pay with FRAX

Your customers can choose to pay with FRAX or other supported cryptocurrencies. They can also pay in fiat, which Calypso Pay will convert into crypto for your account.

3

We Generate a Payment Widget

Calypso Pay instantly creates a payment widget that calculates the amount in FRAX and provides the payment details to your customer. You can also enable auto-conversion to minimize the impact of price volatility.

4

You Receive Payments Directly

Once the payment is processed, funds are sent directly to your business wallet. You have the option to transfer internally between accounts with zero fees.

Why use FRAX for business?

  • Reduced Volatility: Payments remain stable at 1 FRAX ≈ 1 USD, eliminating crypto price risks.
  • Global Reach: Accept payments from customers worldwide without relying on traditional financial systems.
  • Fast Transactions: Payments settle quickly, depending on the underlying blockchain used (e.g., seconds to a few minutes).
  • Low Fees: Compared to credit card processing fees (which are typically 2-4%), FRAX payments often have significantly lower transaction costs.
  • Decentralization: FRAX payments bypass traditional banking systems, reducing potential delays or geographic restrictions.

    • How to accept FRAX payments for business?

    1. Sign Up for a Calypso Pay Account. Register with Calypso Pay in under a minute. Our support team is available to assist with onboarding and integration.

    2. Create an API Key. Generate an API key to set up Calypso Pay payment gateway. This will allow you to accept FRAX payments and make payouts seamlessly.

    3. Set Up a Payment Widget. Create a cryptocurrency Payment Widget, add FRAX as a payment option, and embed it on your website. Customize the payment flow to match your business needs and branding.

    With these steps, you're ready to start accepting FRAX payments through Calypso Pay.

    FRAX payment methods

    Invoices: limited and unlimited crypto invoices, fiat invoices.

    Payouts: single and mass payouts.

    Specific cases: recurring payments, payroll.

    Payment flow: Payment Widget, Payment Link or Embedded Link.

    ‍FRAX payment gateway API: is supported.

    FAQ

    How do I accept FRAX payments?

    • Sign up for a Calypso Pay business account.  
    • Complete the onboarding process with our account manager.  
    • Generate your first API key.  
    • Use our API documentation or get help from our support team to integrate.  
    • Add FRAX as a payment option in your checkout.

    What is FRAX?

    FRAX is a stablecoin pegged to the US Dollar (1 FRAX ≈ 1 USD). It is part of the Frax Finance ecosystem and uses a hybrid algorithmic-collateralized mechanism to maintain its price stability. Unlike fully collateralized stablecoins, FRAX combines fractional reserves with an algorithm to adjust supply dynamically and keep the peg.

    Who created FRAX?

    FRAX was created by Sam Kazemian and the team behind Frax Finance. The project launched in December 2020 with the goal of creating the first-ever fractional-algorithmic stablecoin that combines the best features of traditional stablecoins and decentralized algorithms.

    How does FRAX maintain its price stability?

    FRAX uses a fractional algorithmic mechanism:

    • A percentage of FRAX's value is backed by collateral, such as USDC (a stablecoin).
    • The remaining percentage is stabilized algorithmically through adjustments in supply and demand.For example, if the FRAX price rises above $1, the protocol mints more FRAX to lower the price. Conversely, if the price drops below $1, FRAX is burned, and collateral backing increases to stabilize the value.

    What blockchains support FRAX?

    FRAX is multi-chain and operates on several popular blockchains, including:

    • Ethereum (ERC-20)
    • Binance Smart Chain (BSC)
    • Avalanche
    • Polygon

    ‍This makes it highly versatile and usable in various decentralized applications (dApps) across different ecosystems.

    What are the advantages of using FRAX for payments?

    • Stability: Pegged to 1 USD, avoiding volatility typical of cryptocurrencies.
    • Low Fees: Transactions cost significantly less than traditional payment systems (e.g., Ethereum fees range from $0.50 to $10 depending on network congestion, while cheaper networks like Binance Smart Chain cost as little as a few cents).
    • Fast Settlement: Payments typically settle within seconds to a few minutes based on the blockchain used.
    • Decentralization: No reliance on centralized financial systems or intermediaries.
    • Cross-Chain Compatibility: Supports multiple blockchains for seamless use.

    How can businesses accept FRAX payments?

    Businesses can accept FRAX payments by:

    1. Setting up a crypto payment gateway (e.g. Calypso Pay).
    2. Using smart contracts to automate payment processing.

    How is FRAX different from other stablecoins like USDT or USDC?

    • Fractional Algorithmic Model: Unlike USDT or USDC, which are fully collateralized by fiat or other reserves, FRAX is partially collateralized and relies on an algorithm to stabilize its price.
    • Decentralization: FRAX aims for a higher level of decentralization compared to USDC or USDT, which are issued by centralized entities.
    • Flexibility: FRAX operates on multiple blockchains, offering broader usability in various ecosystems.

    Is FRAX secure to use?

    Yes, FRAX is secure. It operates on blockchain technology, which ensures transparency and immutability. However, businesses must choose secure wallets and adhere to best practices when managing cryptocurrency payments.

    What is the current market cap of FRAX?

    As of November 2024, the market cap of FRAX is approximately $1 billion, making it one of the largest algorithmic stablecoins in the crypto ecosystem. (Always check live data on platforms like CoinMarketCap or CoinGecko for the latest numbers.)

    How does FRAX compare to Bitcoin for payments?

    • Stability: FRAX is pegged to 1 USD, making it more suitable for consistent pricing compared to Bitcoin, which is volatile.
    • Speed and Fees: FRAX payments are processed faster and with lower transaction fees than Bitcoin, especially on blockchains like Binance Smart Chain or Polygon.
    • Purpose: FRAX is designed for stable transactions, while Bitcoin is often viewed as a store of value.

    Is FRAX regulated?

    FRAX itself is decentralized and operates independently of centralized regulations. However, businesses accepting FRAX must comply with local cryptocurrency laws and regulations, which vary by jurisdiction.

    Who uses FRAX payments?

    FRAX payments are used by:

    • Merchants who want to accept stable cryptocurrency payments without volatility risks.
    • Freelancers and service providers for cross-border transactions.
    • E-commerce platforms that want low-cost payment options.
    • DeFi users engaging in lending, staking, or yield farming.

    What is the FRAX token supply model?

    FRAX has a dynamic supply model that adjusts based on demand:

    • If demand increases, new FRAX tokens are minted.
    • If demand decreases, FRAX is burned to reduce supply and stabilize the price.

    This hybrid model allows FRAX to scale effectively while maintaining its 1 USD peg.

    Is it legal to accept FRAX payments for business?

    It depends on your location. Calypso Pay works in all countries except the following ones:

    • Belarus
    • the Central African Republic
    • the Democratic Republic of the Congo
    • Iran
    • Iraq
    • Lebanon
    • Libya
    • Mali
    • Myanmar
    • Nicaragua
    • North Korea
    • the People’s Republic of China
    • Russia
    • Somalia
    • South Sudan
    • Sudan
    • Syria
    • Ukraine
    • Venezuela
    • Yemen
    • Zimbabwe