# Why FRAX-Based? The Blindex protocol is derived from FRAX and it's our intention to show our respect for the great work they've done by submitting a governance proposal (once the governance is sufficiently decentralized) to allocate some BDX tokens to the FRAX team. Here's a short summary of what makes it so unique and groundbreaking: * **Fractional-Algorithmic** – FRAX is the first and only stablecoin with parts of its supply backed by collateral and parts of the supply algorithmic. This means it is the first stablecoin to have part of its supply floating/unbacked. The ratio of collateralized and algorithmic depends on the market's pricing of the stablecoin. If the stablecoin is trading at above $1, the protocol decreases the collateral ratio. If the stablecoin is trading at under $1, the protocol increases the collateral ratio. * **Decentralized & Governance-minimized** – Community governed and emphasizing a highly autonomous, algorithmic approach with no active management. * **Fully on-chain oracles** – Frax uses Uniswap (ETH, USDT, USDC time-weighted average prices) and Chainlink (USD price) oracles. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.blindex.io/quick-intro/why-frax-based.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.