# fxUSD

> fxUSD by f(x) Protocol is a decentralized, non-algorithmic stablecoin pegged to the USD. Fully collateralized on Ethereum by crypto assets like stETH, it offers...

- Canonical URL: https://iq.wiki/wiki/fxusd
- Categories: Cryptoassets
- Tags: Infrastructure
- Created: 2025-10-19T14:34:39.520Z
- Last updated: 2026-07-17T00:35:58.332Z
- Source: IQ.wiki — the world's largest blockchain and crypto encyclopedia (https://iq.wiki)

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**fxUSD** is a decentralized, crypto-collateralized [stablecoin](https://iq.wiki/wiki/stablecoin) that operates on the [Ethereum](https://iq.wiki/wiki/ethereum) [blockchain](https://iq.wiki/wiki/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](https://iq.wiki/wiki/stablecoin) with deep liquidity and efficient trading mechanisms. [\[2\]](#cite-id-98KvScjxjo)​

## Overview

fxUSD was created as part of the f(x) Protocol, an ecosystem developed with support from AladdinDAO. The [stablecoin's](https://iq.wiki/wiki/stablecoin) primary objective is to offer a decentralized alternative to centralized [stablecoins](https://iq.wiki/wiki/stablecoin) 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. [\[1\]](#cite-id-1LL5JNURan)

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](https://iq.wiki/wiki/collateral) are Lido's [staked Ether (stETH)](https://iq.wiki/wiki/lido-staked-ethereum-steth) and [Wrapped Bitcoin (WBTC)](https://iq.wiki/wiki/arbitrum-bridged-wbtc). The system is designed to automatically grow its liquidity by leveraging the value provided to the underlying [Liquid Staking Derivatives (LSDs)](https://iq.wiki/wiki/lsdfi) that back the [stablecoin](https://iq.wiki/wiki/stablecoin). [\[1\]](#cite-id-1LL5JNURan)  [\[2\]](#cite-id-98KvScjxjo) [\[7\]](#cite-id-3rOGOSWSyO)

## Tokenomics

The max supply is uncapped, as new fxUSD can be [minted](https://iq.wiki/wiki/minting) whenever users deposit [collateral](https://iq.wiki/wiki/collateral) to open leveraged positions. The total supply is determined by the total debt issued against the [collateral](https://iq.wiki/wiki/collateral) held by the protocol. [\[2\]](#cite-id-98KvScjxjo)

### 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.  [\[5\]](#cite-id-meVQLI285M) [\[6\]](#cite-id-b7H05tZw8l)

## Market and Trading

fxUSD is primarily traded on decentralized exchanges (DEXs) on the [Ethereum](https://iq.wiki/wiki/ethereum) network. The most active trading venues include:

* Fluid [(Ethereum)](https://iq.wiki/wiki/ethereum)
* Curve [(Ethereum)](https://iq.wiki/wiki/ethereum)

Common trading pairs for fxUSD include swaps with other [stablecoins](https://iq.wiki/wiki/stablecoin) such as [USDC](https://iq.wiki/wiki/usdc), [GHO](https://iq.wiki/wiki/gho-gho), msUSD, and [eUSD](https://iq.wiki/wiki/eusd). [\[2\]](#cite-id-98KvScjxjo)