Frax Finance, the multifaceted stablecoin protocol, has unveiled Frax Bonds (FXB), a utility token that converts into 1 FRAX stablecoin trustlessly upon maturity.

The launch marks the completion of Frax’s v3 roadmap, deploying all its new features.

According to the protocol, the initial bonds have maturities of July 30, 2024, followed by Dec. 31, 2024, and Dec. 31, 2026. Bonds worth $500K for each maturity are being sold through a gradual Dutch auction (a method wherein the price is reduced until a buyer is found).

Over $1.1M of bids have been placed as of the time of writing.

“FXBs are a way to buy future FRAX stablecoins at a particular timestamp for a discount today,” said the team. Their expectation is that bond yields will mirror U.S Treasury rates for similar maturities with the caveat that FXBs “do not guarantee that right, do not confer any legal redeemability assumptions (other than for $FRAX stablecoin tokens).”

Currently, Frax commands a $653M market capitalization, ranking #102 on Coingecko.

Frax Bonds will be usable across DeFi, including Curve Finance pools, trading pairs that are looking for leverage, and trustless debt repayment.

The community behind the stablecoin protocol voted in late December to deploy $20M of its collateral to U.S. Treasuries. It partnered with Centrifuge, an emerging leader in the RWA space.