💰Stability Pool
Last updated
Last updated
Stability Pool is a cornerstone of the protocol, designed to maintain system stability and provide rewards for participants.
1. Purpose and Rewards
Users can deposit fxUSD or USDC into the Stability Pool to either earn: - wstETH and WBTC (converted to wstETH) coming from xPOSITION fees and reserve yield and Aave yields. - Or $FXN emissions. This incentivizes participation and strengthens the protocol’s resilience.
2. Peg Stabilization
The Stability Pool ensures that fxUSD maintains its peg to USD through automatic swaps between fxUSD and USDC based on exchange conditions:
If fxUSD is undervalued: The pool swaps USDC for fxUSD to restore the peg.
If fxUSD is overvalued: The pool swaps fxUSD for USDC to stabilize its price.
These adjustments are executed using Chainlink oracle prices to ensure accurate valuations, offering price stability while optimizing returns for users.
3. Depeg Protection
In the rare event of a USDC depeg, the protocol halts peg maintenance and temporarily disables deposits to safeguard users and uphold system integrity.
4. Rebalance and Liquidation Procedures
When necessary, the protocol redeems fxUSD from the Stability Pool. If the pool lacks sufficient fxUSD, the USDC obtained is used to repurchase fxUSD at a ratio not exceeding 1:1, thereby stabilizing the peg.
5. Asynchronous or Synchronous Execution
Depending on market conditions, these operations can be carried out synchronously or asynchronously. This flexibility ensures sufficient liquidity while maintaining the fxUSD peg and supporting the overall stability of the system.
fxSAVE is the tokenized stability pool built by Concentrator (another protocol built by Aladdin DAO). It is a 4626 vault that automatically compounds all wstETH and WBTC rewards into more fxUSD and USDC. Another way of describing fxSAVE is that it is a yield-bearing stablecoin that harnesses the Stability Pool's yields.
Learn how to deposit into the Stability Pool and earn Stable yield 👇