usdx.money USDX (USDX)
USDX.Money USDX is a synthetic stablecoin pegged to the US dollar. It is crafted to function within the Bitcoin blockchain ecosystem, serving as an alternative to traditional stablecoins that depend on banking infrastructure. USDX utilizes a delta-neutral portfolio strategy to maintain its peg stability, operating independently from centralized financial systems.
Overview
USDX is designed as a synthetic USD stablecoin that achieves stable value through delta-neutral hedging. This approach ensures that fluctuations in the underlying collateral, like Bitcoin, do not affect USDX's value. The protocol is set up to generate yield and operates independently from traditional financial systems.
Tokens
| Ticker | USDX |
| Category | Stablecoins |
| Website | https://usdx.money/ |
| @usdx_money | |
| Telegram | USDX_Community |
| Contract Addresses | |
|---|---|
| binance-smart-chain | 0xf3...ef Copied! |
| ethereum | 0xf3...efCopied! |
| arbitrum-one | 0xf3...efCopied! |
USDX
USDX is backed by Bitcoin and maintained using hedging strategies that ensure a delta-neutral position. This stablecoin plays a crucial role in liquidity provision for both Automated Market Makers (AMMs) and Centralized Exchanges (CEXs).
sUSDX (Staked USDX)
sUSDX represents USDX that has been staked and accrues a share of the protocol’s yield. Its value increases over time, not through rebasing, but by appreciating as the protocol generates yield.
Features
- Permissionless Acquisition: USDX can be acquired or sold using stablecoins like USDT or USDC within liquidity pools.
- Staking: Staking USDX generates sUSDX, which allows holders to receive a portion of the protocol’s yield.
- Liquidity Provision: Users can contribute to USDX liquidity pools and secure LP tokens for rewards.
- Direct Minting: Bitcoin can be used as collateral to mint USDX, with KYC/KYB verification required.
- Direct Redemption: USDX can be exchanged for Bitcoin, also requiring KYC/KYB verification.
Peg stability mechanism
USDX maintains its peg through a delta-neutral hedging strategy, balancing collateralized positions with short positions in derivatives markets. This strategy helps sustain USDX's value amidst market fluctuations, ensuring it remains a reliable medium of exchange or store of value.
Yield generation
The protocol generates yield through funding and basis spreads from its delta hedging positions. This yield varies with market conditions, and any potential losses from negative funding rates are absorbed by the USDX.Money insurance fund.
Risk management
USDX.Money addresses various risks associated with its design, such as smart contract risk, external platform risk, liquidity risk, custodial operational risk, exchange counterparty risk, and market risk. To mitigate these risks, the protocol employs custodians, diversifies collateral, and ensures transparency via on-chain proof of backing assets and hedging positions.
Staking mechanism
When Bitcoin is deposited as collateral, USDX.Money opens a corresponding short position in a derivatives market to hedge the collateral’s value. This helps maintain a delta-neutral stance and minimizes counterparty risk. The collateral remains on-chain, secured through off-exchange settlement.
sUSDX and staking
Staked USDX is represented by sUSDX, which gains value based on the protocol's yield generation. The staking procedure does not involve lending or rehypothecating assets; instead, the value of sUSDX increases naturally over time.
Key information
- Permissionless Liquidity: USDX can be traded in decentralized liquidity pools.
- Restricted Minting and Redemption: Only approved entities passing KYC/KYB screening can mint and redeem USDX.
- Cross-Market Arbitrage: Arbitrage opportunities exist by minting and redeeming USDX through external markets like Binance or Curve.