# Is fxUSD an algorithmic stablecoin?

Absolutely not. All stablecoins issued by f(x) Protocol, including its flagship fxUSD, are fully collateralized with top-tier DeFi assets. Specifically, fxUSD is backed solely by Lido's stETH and WBTC. The f(x) invariant ensures unparalleled capital efficiency by maintaining the stablecoin's 100% collateralization, while the xPOSITION (v2) and leveraged tokens (v1) manage the protocol's over-collateralization.


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