♾️fxMINT: borrowing fxUSD against your BTC and ETH

fxMINT allows you to mint fxUSD directly by depositing collateral (ETH/WBTC) at a 0% annual interest rate and with minimal liquidation risks. Instead of annual interests, we charge a one-time opening and closing fee for your loan. Keep the loan open for as long as you need. Note that a temporary borrowing cost can be applied to the whole collateral in rare circumstances. The mechanism is exactly the same as for xPOSITIONs, excluding the flashloan operation. While xPOSITIONs give you overexposure to the collateral, fxMINT maintains a constant exposure while achieving better capital efficiency. Using the xPOSITIONs infrastructure has multiple implications; let's break it down.

Here’s how the process works:

1. Collateral Submission

The user provides collateral (e.g., ETH or WBTC), which is used to mint fxUSD, the protocol's stablecoin, and fund the leverage mechanism.

2. Zap for Collateral

The protocol only uses wstETH and WBTC as collateral. If the users pledges WETH, it will be automatically swapped for wstETH. But remember, on f(x) Protocol, the collateral yields are mostly distributed to the stable stakers. It means that your leverage position keeps an ETH or WBTC exposure and doesn't earn yield on the collateral.

3. Minting fxUSD

fxUSD is minted using your collateral. On f(x) Protocol, you only pay a one-time fee when opening the position and when closing it. The fee is added to your debt position, resulting in a slightly higher amount of fxUSD to repay than what you receive in your wallet.

4. Repaying your debt

If you want to reduce your LTV/Leverage and or withdraw your collateral, you need to repay your fxUSD debt. When doing so, the closing fee is applied to the amount of repaid debt. Learn more about the fees below.

💵Fees

Understanding the temporary borrowing cost

Under certain market conditions, a temporary borrowing cost can be applied to your position. Since fxMINT utilizes the xPOSITION infrastructure, the cost is applied to the entire collateral. Please be aware that the lower the LTV of your position, the higher the borrowing cost is relative to your debt. Again, in most situations, that cost is temporary.

Learn more here: How does f(x) Protocol minimize funding costs or annual interests?

What's the liquidation design for fxMINT?

Since fxMINT uses the same infrastructure as xPOSITIONS, the liquidation brake applies, protecting your position from any hard liquidation. Learn more about the liquidation brake 🔽

🪂Rebalancing the Position (Liquidation Brake)

Learn more about the liquidation brake and hard liquidation LTVs.

🚨Risk parameters