fxUSD is a decentralized, crypto-collateralized stablecoin that operates on the Ethereum blockchain and is designed to maintain a peg to the U.S. dollar. Developed by the f(x) Protocol, it aims to provide a scalable, yield-bearing stablecoin with deep liquidity and efficient trading mechanisms. ^[2]

Overview

fxUSD was created as part of the f(x) Protocol, an ecosystem developed with support from AladdinDAO. The stablecoin's primary objective is to offer a decentralized alternative to centralized stablecoins by integrating features such as built-in yield generation and zero-slippage swaps for certain asset pairs within its ecosystem. The protocol's design emphasizes capital efficiency and robust peg stability through a fully collateralized model. ^[1]

Unlike algorithmic stablecoins, which rely on complex algorithms and a secondary token to maintain their peg, fxUSD is fully backed by crypto assets. The protocol's documentation explicitly distinguishes fxUSD from models like the former Terra/LUNA system, highlighting that every fxUSD token is collateralized by assets held within the protocol. The core assets used for collateral are Lido's staked Ether (stETH) and Wrapped Bitcoin (WBTC). The system is designed to automatically grow its liquidity by leveraging the value provided to the underlying Liquid Staking Derivatives (LSDs) that back the stablecoin. ^{[1] [2] [7]}

Tokenomics

The max supply is uncapped, as new fxUSD can be minted whenever users deposit collateral to open leveraged positions. The total supply is determined by the total debt issued against the collateral held by the protocol. ^[2]

Governance and Token Structure (fxUSD)

fxUSD does not function as a governance token. It is designed solely as a collateral-backed stablecoin within the f(x) Protocol. Its role is limited to value stability, liquidity, and participation in system mechanisms.

Token Utilities

• fxUSD serves primarily as the stable asset of the protocol. Holders can:
  • Redeem it for underlying collateral according to protocol rules.
  • Deposit it into the Stability Pool, where fxUSD is used to cover system debt from liquidations and may receive returns from collateral proceeds or protocol fees.
• fxUSD itself does not grant voting rights or governance privileges.

Supply and Issuance

• fxUSD is minted when users deposit approved collateral (such as liquid staking tokens) into the protocol.
• Minting is paired with the creation of leveraged exposure (e.g., xPOSITION or sPOSITION), meaning the fxUSD supply is directly tied to user demand for leverage within the protocol.
• There is no fixed maximum supply; issuance expands or contracts depending on collateral deposits and redemptions. ^{[5] [6]}

Market and Trading

fxUSD is primarily traded on decentralized exchanges (DEXs) on the Ethereum network. The most active trading venues include:

• Fluid (Ethereum)
• Curve (Ethereum)

Common trading pairs for fxUSD include swaps with other stablecoins such as USDC, GHO, msUSD, and eUSD. ^[2]