fx Docs
  • f(x) Protocol Documentation
  • OVERVIEW
    • 📖Abstract
    • ⭐Core Products of f(x) Protocol 2.0
  • f(x) Protocol Mechanisms
    • ⚖️The f(x) Invariant
    • ⚙️Key Functions of f(x) 2.0
    • 🚀Creating a Leveraged Position (xPOSITION)
    • 🪂Rebalancing the Position (Liquidation Brake)
      • Understanding the band system
    • 💰Stability Pool
    • 💵Fees
  • RISK MANAGEMENT
    • 🧘‍♂️Risk framework
    • ✅Advanced Peg Protection Mechanisms
      • 🚨Risk parameters
      • 🧭Oracle
      • 🛡️Audit Reports
    • Earn with f(x)
      • 💲USD high & sustainable yield
      • 🪙$FXN Tokenomics
        • veFXN
        • FXN Farming and veFXN Boost
      • 🔥Protocol Revenue & Distribution
    • POWER TO THE PEOPLE
      • 🤝Community Booster Program
      • 🫂Referral Program
    • FAQ
      • 🟦Is fxUSD an algorithmic stablecoin?
      • 🟦How do f(x) Protocol stablecoins maintain stability?
      • 🟦Is there any LUNA-like risk?
      • 🟦Is it truely impossible to get liquidated?
      • 🟦What could go wrong?
      • 🟦Why are there different stablecoins?
      • 🟦What is the difference between f(x) Protocol V1 and V2?
      • 🟦What price drop would it require for my xPOSITION to be rebalanced/liquidated?
    • GUIDES
      • 📈How to open a leverage position (xPOSITION)
      • 📉How to close a leverage position (xPOSITION)
      • 📐How to adjust your leverage
      • ➕How to add/reduce a leverage position?
      • 💰How to stake into the stability pool?
      • 🚶‍♂️How to unstake from the stability pool?
    • MORE
      • 🔡Token Breakdown
      • 1️⃣f(x) Protocol 1.0
        • Leverage
        • Earn
        • Stability Mechanism
        • FX Auto-Compound
        • Oracle
      • 🖥️Resources
        • Contracts
        • Useful links
      • 🪔Aladdin DAO
    Powered by GitBook
    On this page
    Export as PDF
    1. FAQ

    How do f(x) Protocol stablecoins maintain stability?

    PreviousIs fxUSD an algorithmic stablecoin?NextIs there any LUNA-like risk?

    Last updated 16 days ago

    Stablecoins can be minted and redeemed at the oracle price, ensuring seamless functionality. For fxUSD, several mechanisms guarantee a perfect peg:

    • f(x) Protocol establishes and maintains a deep fxUSD/USDC liquidity pool.

    • The fxUSD stability pool offers high and sustainable yields derived from stETH staking, xPOSITION opening fees, and FXN emissions. This stability pool, which accepts both USDC and fxUSD, also acts as a peg keeper by purchasing fxUSD when it trades below peg and selling it back to USDC when it trades above.

    • xPOSITION cannot be opened if fxUSD is trading below peg.

    • fxUSD can always be redeemed at the oracle price for stETH, safeguarding it against any significant de-peg events. Learn more here.

    ✅Advanced Peg Protection Mechanisms
    🟦