Frax (FRAX) is a fractional algorithmic stablecoin that is partially backed by collateral and partially stabilized through an algorithmic mechanism. The balance between collateralization and algorithmic stabilization is dynamic and depends on the market price of FRAX. When FRAX trades above $1, the protocol reduces the collateralization ratio. Conversely, when FRAX trades below $1, the protocol increases the collateralization ratio.