✅Advanced Peg Protection Mechanisms

Please learn below how the protocol ensures fxUSD's peg at all times.

Stability Pool acts as Peg-Keeper

The stability pool accepts both fxUSD and USDC. If fxUSd trades below $1.00, it will automatically buy it and sell it back to USDC if fxUSD trades above $1.00.

➡️ Ensures fxUSD stability through arbitrage operations in the fxUSD/USDC AMM pool.

Operational Restrictions During Depegging

If fxUSD is depegged, new xPOSITION openings are prohibited. This prevents excessive fxUSD minting and reduces selling pressure on fxUSD.

➡️ No more selling pressure on fxUSD if traded below peg.

xPOSITION Funding Fees

During a depeg event, funding fees are applied to xPOSITION holders. This funding is delivered to the Stability Pool, making it more attractive to USDc and fxUSD deposits, thus facilitating the peg restoration. ➡️ The Stability Pool gets a high real yield, facilitating the peg keeping.

Redemption of fxUSD

Users can always purchase fxUSD on the secondary market and redeem it for $1.00 worth of collateral, subject to applicable fees. ➡️ fxUSD has a hard peg by design, thanks to the redemption mechanism