IQ.wiki

Read

Edit

History

Notify

Share

usdx.money USDX

USDX.Money USDX is a synthetic pegged to the US dollar. It is designed for use within the 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 systems.[1][2][4][6]

Overview

USDX serves as a synthetic USD that maintains a stable value by utilizing delta-neutral hedging. This ensures that fluctuations in the underlying , such as , 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 and maintained through hedging strategies that create a delta-neutral position. This is integral to in both (AMMs) and (CEXs).

sUSDX (Staked USDX)

sUSDX represents staked USDX and accrues a portion of the protocol’s yield. Unlike some 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 such as or in .
  • Staking: USDX generates sUSDX, which entitles holders to a portion of the protocol’s yield.
  • Liquidity Provision: Users can contribute to USDX and lock LP tokens to earn rewards.
  • Direct Minting: can be deposited as collateral to mint USDX, subject to /KYB verification.
  • Direct Redemption: USDX can be redeemed for , also requiring /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 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 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 .
  • Restricted Minting and Redemption: and redeeming USDX is available only to approved entities that pass /KYB screening.
  • Cross-Market Arbitrage: Arbitrage opportunities are available by and redeeming USDX through external markets, such as or .[1][2][3][5][7]

See something wrong? Report to us.

usdx.money USDX

Commit Info

Edited By

Edited On

October 14, 2024

Feedback

Average Rating

Based on over 1 ratings

How was your experience?

Give this wiki a quick rating to let us know!

Twitter Timeline

Loading...

Loading

Media

REFERENCES

Join the IQ Brainlist

Sign up for the IQ Brainlist to get access to editing on the IQ.wiki site!

Join Now

Subscribe to our newsletter

The IQ Ecosystem Report will keep you updated on everything IQ.

Subscribe

IQ.wiki

IQ.wiki's vision is to bring blockchain knowledge to the world and knowledge onto the blockchain. A part of Brainfund group

https://twitter.com/IQWIKIhttps://www.reddit.com/r/Everipedia/https://t.me/everipediahttps://www.instagram.com/iqwiki_/https://github.com/EveripediaNetworkhttps://discord.gg/x9EWvTcPXthttps://www.facebook.com/iqdotwiki

IQ

What's IQ?StakingBonds

Company

About usCareersWe're hiringBrandingIQ GPTIQ Dashboard

© 2024 IQ.wiki Powered By BrainDAO & IQ