What is USDx?

What is USDx?

Introduction

Here's an in-depth explanation of USDx, its role within the Synthetix ecosystem, and the mechanics that underpin its stability. It will cover the process of minting and burning, the strategies used to maintain the peg, and the role of the wrapper in managing market conditions.

What is USDx?

USDx is a decentralized stablecoin issued against collateral assets held in vaults on Arbitrum. It serves as margin collateral for traders using Perps v3 and is minted using a mix of decentralized collateral like USDe, ETH, and BTC. As a critical element in maintaining liquidity within Kwenta's perpetual futures markets and other Synthetix-powered protocols, USDx ensures the smooth operation of on-chain trading.

USDx is issued through a CDP (Collateralized Debt Position)-like contract. Collateral Liquidity Providers (LPs) earn yield based on the net trader PnL (Profit and Loss) across all exchange deployments:

• If traders’ net PnL is negative, LPs earn a positive yield.

• If traders’ net PnL is positive, LPs experience negative yields.

The issuance of USDx helps to balance open interest within the Synthetix platform. The total debt cannot exceed the sum of open interest and stable coin debt, optimizing the use of LP capital.

Where to get USDx?

USDx can be swapped into via: https://swap.defillama.com/?chain=arbitrum&from=0x0000000000000000000000000000000000000000&tab=swap&to=0xb2F30A7C980f052f02563fb518dcc39e6bf38175

USDx on Arbitrum contract address: 0xb2F30A7C980f052f02563fb518dcc39e6bf38175