USDX.Money USDX is a synthetic stablecoin pegged to the US dollar. It is designed for use within the Bitcoin blockchain ecosystem, providing an alternative to traditional stablecoins that depend on banking infrastructure. USDX employs a delta-neutral portfolio strategy to maintain its peg stability, operating independently of centralized financial systems.^[1][2][4][6]

Overview

USDX serves as a synthetic USD stablecoin that maintains a stable value by utilizing delta-neutral hedging. This ensures that fluctuations in the underlying collateral, such as Bitcoin, do not impact the value of USDX. The protocol is structured to generate yield and operate independently from conventional financial infrastructure.^{[1][2][4][5][6][7]}

Tokens

USDX

USDX is backed by Bitcoin and maintained through hedging strategies that create a delta-neutral position. This stablecoin is integral to liquidity provision in both Automated Market Makers (AMMs) and Centralized Exchanges (CEXs).

sUSDX (Staked USDX)

sUSDX represents staked USDX and accrues a portion of the protocol’s yield. Unlike some staking mechanisms, sUSDX does not rely on increasing supply through rebasing; instead, its value appreciates over time.

Features

• Permissionless Acquisition: USDX can be bought or sold using stablecoins such as USDT or USDC in liquidity pools.
• Staking: Staking USDX generates sUSDX, which entitles holders to a portion of the protocol’s yield.
• Liquidity Provision: Users can contribute to USDX liquidity pools and lock LP tokens to earn rewards.
• Direct Minting: Bitcoin can be deposited as collateral to mint USDX, subject to KYC/KYB verification.
• Direct Redemption: USDX can be redeemed for Bitcoin, also requiring KYC/KYB verification.^{[1][2][3][5][7]}

Peg Stability Mechanism

USDX employs a delta-neutral hedging strategy, ensuring that collateralized positions are balanced with short positions in derivatives markets. This helps maintain the value of USDX even when market conditions fluctuate. By offsetting potential risks from Bitcoin price movements, USDX remains stable for use as a medium of exchange or store of value.

Yield Generation

The protocol’s yield is generated through funding and basis spreads derived from its delta hedging positions. This yield depends on market conditions, and if funding rates become negative, the USDX.Money insurance fund is designed to absorb any resulting losses.

Risk Management

USDX.Money has identified various risks associated with its design, including:

• Smart Contract Risk
• External Platform Risk
• Liquidity Risk
• Custodial Operational Risk
• Exchange Counterparty Risk
• Market Risk

To mitigate these risks, the protocol employs custodians, maintains diversified collateral, and ensures transparency through on-chain proof of backing assets and hedging positions.^[1][2][5][7]

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 ensures that the system remains delta-neutral and minimizes exposure to counterparty risk. The collateral remains on-chain and is secured through off-exchange settlement.

sUSDX and Staking

Staked USDX is represented by sUSDX, which accumulates value based on the yield generated by the protocol. The staking process does not involve lending or rehypothecating the staked assets. Instead, the value of sUSDX naturally increases over time, reflecting the accrued yield.

Key Information

• Permissionless Liquidity: USDX can be traded in decentralized liquidity pools.
• Restricted Minting and Redemption: Minting and redeeming USDX is available only to approved entities that pass KYC/KYB screening.
• Cross-Market Arbitrage: Arbitrage opportunities are available by minting and redeeming USDX through external markets, such as Binance or Curve.^{[1][2][3][5][7]}