> For the complete documentation index, see [llms.txt](https://fxprotocol.gitbook.io/fx-docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://fxprotocol.gitbook.io/fx-docs/f-x-protocol-mechanisms/key-functions-of-f-x.md).

# Key Functions of f(x)

**Opening and Closing xPOSITION - Minting fxUSD**

* Users can open xPOSITION by providing stETH or WBTC as collateral. fxUSD is minted as a byproduct of the xPOSITION opening using the [f(x) Invariant](/fx-docs/f-x-protocol-mechanisms/the-f-x-invariant.md) formula.
* The system dynamically adjusts leverage ratios and fxUSD minting to maintain overall stability.

**Opening an Closing sPOSITION**

* Users can open sPOSITION by providing fxUSD as collateral. The leverage is obtained using a flashloan which is repaid using the fxUSD's backing assets. [Learn more](/fx-docs/f-x-protocol-mechanisms/creating-a-leveraged-short-position-sposition.md).
* The system adjust leverage ratios to maintain overall stability.

**Rebalancing Operations**

* Automatically adjusts leveraged positions to safe levels (see [Risk parameters](/fx-docs/risk-management/risk-parameters.md)), significantly reducing liquidation risk.
* This process is handled automatically by keepers.

**Liquidation Mechanism**

* If rebalancing fails, the protocol initiates liquidation by redeeming associated fxUSD to always protect fxUSD's integrity.
* This process is handled automatically by keepers.

**Stability Pool**

* Offers yield opportunities for users while serving as a peg-keeper for fxUSD.
* Maintains price stability through efficient arbitrage operations.

<figure><img src="https://3804711989-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FYUipYKknBzY0ljM5ssnI%2Fuploads%2FeWUiqmAZEBeDeOK18zFc%2Ffx_2.0_longsshorts.png?alt=media&amp;token=af196e93-21bf-4821-a051-0bbb13546192" alt=""><figcaption></figcaption></figure>


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