The Frax Finance community vote has decided to fully collateralize the FRAX stablecoin and gradually remove algorithmic support

ChainCatcher news, the Frax Finance community has voted to approve a governance proposal that sets the target collateralization ratio (CR) of the FRAX stablecoin to 100%, removing the protocol's algorithmic support for the stablecoin, making FRAX a fully collateralized stablecoin. Additionally, the proposal states that it will not rely on minting FXS to achieve the CR increase, but will instead use the protocol's revenue to fund the increased CR, and FXS buybacks will be paused, with veFXS yields remaining unchanged. Furthermore, the proposal authorizes the purchase of $3 million of fxsETH each month to increase the stablecoin reserves.

It is reported that FRAX was originally designed as a partially collateralized, partially algorithmic stablecoin, with its collateralization ratio adjusted based on the market demand for FRAX. (source link)