The Frax protocol, a fractional-algorithmic stablecoin system, has faced controversy over alleged ties to military contractor shareholders. Critics point to co-founder Stephen Moore’s past writings and the protocol’s governance token, FXS, which some claim is influenced by defense industry stakeholders. These concerns raise questions about decentralization and potential conflicts of interest in Frax’s ecosystem. However, no concrete evidence has confirmed direct military contractor involvement in Frax’s shareholder base. The protocol maintains its focus on scalable, decentralized finance, with FRAX pegged to the USD and backed by collateral and algorithms. Despite the debate, Frax continues to grow, emphasizing community governance and transparency to address skepticism. The controversy underscores broader tensions in DeFi regarding trust, autonomy, and external influence.