The collateral ratio (CR) of 100% is important for Frax because it ensures that the stablecoin (FRAX) is fully backed by collateral. This means that for every unit of FRAX in circulation, there is an equivalent value of collateral backing it. This ensures stability and trust in the value of FRAX, as it is fully redeemable for its underlying collateral. Additionally, a 100% CR helps to mitigate the risk of insolvency and provides assurance to FRAX holders that the stablecoin is secure and reliable. 🧠 Powered by IQGPT.com
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