What's keeping frax valuable?

I just stumbled upon it on aave and got curious, looks like it lost its peg as a stablecoin way back at the start of 2024, yet it still has some value. There’s been a lot of pumping and dumping going on, but it hasn’t dropped below $0.4, which is pretty interesting when you check out the chart. So what's the deal? Is there still some backing behind it?

It's just people speculating and nothing more. As for frax being a stablecoin it's indeed depegged long time ago. The reason it's valued at $0.8 possibly because it's shifting its purpose from stablecoin to a governance token/gas token. Frax's new stabelcoin product is FRXUSD.

There are actually two different FRAX tokens. The one that is on Aave is the old stablecoin, which has been renamed to Legacy Frax Dollar. It is still worth $0.99, so I assume there is still some collateral backing this token. The token that is officially recognized as FRAX today, and is worth $0.80, is Fraxtal’s governance token and L2 gas token. It was previously named Frax Shares. It’s honestly very confusing trying to differentiate between FRAX, legacy FRAX, WFRAX, frxUSD, sfrxUSD, and FXS.

That was some positive outlook you got there buddy despite the drop that occurs. For some, maybe they will immediately say that the coin is turning into a scam already. I won't blame them because there is truly a couple of scam algorithmic-based stable coin like Terra-Luna before which affected tons of people. So a lot of them are more careful now. Once a stablecoin was depegged from being stable, I guess that it would be high risky to invest with for the hope getting back to normal. Honestly stablecoins are not for investments.

Thank you, this was a very good explainer but I don't know what the project frax is (the $0.8 token one, I don't know if it's named that way because it's not doing much though). I'm more confused or spiked to $1.6 if it was a stablecoin. This also leaves out why legacy frax on aave (just called frax on there has a warning and a high apy - I guess that could be because it's being depreciated and we might expect that of dai soon). They are good for quick conversions tbf but I'm very concerned a lot crash or do poorly. I wonder if there's a studied overall half life for stablecoins that are adopted by platforms that have to approve them like aave/compound - I can't imagine it being that high.

Thats really nice information and yeah it's very confusing with all these frax coins. I've tried a short search in CMC with keyword frax and there is even a frax ether (FRXETH) and so on. Absolute mess and no wonder people are confused.