Decomposing Yield-Bearing Tokens with f(x) Protocol 2.0

At genesis, the f(x) Protocol reserves consist exclusively of Lido’s stETH. Users can mint fxUSD and open xPOSITION by supplying stETH as collateral. The staking rewards from stETH primarily support system stability and protocol revenue.

f(x) Protocol ensures that the total value of all fxUSD combined with the total value of all xPOSITIONs always equals the total value of the collateral reserves. Dynamic adjustments to the leverage ratio of xPOSITION and the pegging ratio of fxUSD ensure collaboration between zero-volatility stablecoins and high-leverage tools.

Last updated