> For the complete documentation index, see [llms.txt](https://docs.aladdin.club/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.aladdin.club/f-x-protocol-new/overview.md).

# Overview

f(x) Protocol is a next-generation DeFi system that innovatively addresses the challenges of volatility in Ethereum, Bitcoin, and Convex markets. It achieves this by splitting **BaseTokens** like ETH, BTC, and CVX into unique pairs of tokens:

**Stable tokens(fTokens)** (fETH, fxUSD, rUSD, btcUSD, cvxUSD): Low-volatility assets for users seeking stability.

**Leveraged tokens(xTokens)** (xETH, xwBTC, xCVX): High-volatility assets for those aiming for maximized returns without the typical risks of liquidation or funding fees.

This dual-token architecture ensures balanced exposure to crypto markets, enabling traders, investors, and liquidity providers to benefit from tailored strategies.

* fETH: A floating stablecoin designed to track ETH with reduced volatility (around 10% of ETH’s price movements). It offers users a stable exposure to Ethereum without dependence on fiat-backed systems.
* xETH: A perpetual leveraged token offering 2x to 3x long exposure to ETH price movements, ideal for those seeking enhanced returns in bull markets.
* fxUSD: A USD-pegged stablecoin using stETH and frxETH as collateral. It provides seamless liquidity and serves as a bridge for DeFi markets.
* xstETH, xfrxETH: An ETH leverage token with exposure up to 4x, offering both excitement and efficiency for traders.
* rUSD: A stablecoin that uses the same mechanism as fxUSD, but with its reserve comprised of only ETH Liquid Restaking Tokens (LRT), starting with Ether.fi’s eETH and Renzo Protocol's ezETH.
* xeETH, xezETH: An ETH leverage token with exposure up to 4x, offering both excitement and efficiency for traders.
* btcUSD: A USD-pegged stablecoin leveraging wBTC as collateral. It provides seamless liquidity and serves as a bridge for DeFi and BTC markets.
* xwBTC: A Bitcoin leverage token with exposure up to 5.6x, offering both excitement and efficiency for traders.
* cvxUSD: A USD-pegged stablecoin leveraging CVX as collateral. It provides seamless liquidity and serves as a bridge for DeFi markets.
* xCVX: A CVX leverage token with exposure up to 3x, offering both excitement and efficiency for traders.

By carefully balancing volatility, f(x) Protocol provides a smart, user-friendly system for managing ETH’s unpredictable market dynamics.

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