# 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.

\
\
\ <br>


---

# Agent Instructions: Querying This Documentation

If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question.

Perform an HTTP GET request on the current page URL with the `ask` query parameter:

```
GET https://docs.aladdin.club/f-x-protocol-new/overview.md?ask=<question>
```

The question should be specific, self-contained, and written in natural language.
The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.

Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.