fx USD Fee Sharing
This pool allows you to deposit fxUSD or USDC, earning token rewards and fees while helping maintain the stablecoin’s peg. If the protocol needs to rebalance or liquidate positions, it redeems a portion of these deposits to cover shortfalls and preserve collateralization levels. In doing so, depositors earn yield but also take on some collateral risk in extreme market conditions.
This opportunity acts as a savings account denominated in USD.
When you deposit fxUSD or USDC into the Stability Pool, you’re helping maintain fxUSD’s 1:1 peg to USD. The pool automatically arbitrages between fxUSD and USDC based on Chainlink oracle prices: if fxUSD trades below $1, the pool buys it with USDC; if it trades above $1, it sells fxUSD for USDC. fxUSD is fully backed by reserves of BTC and ETH collateral. While the strategy is delta-neutral in USD terms, risks include dependence on the proper functioning of the Stability Pool, sufficient liquidity for peg maintenance, and the effectiveness of the redemption mechanism during periods of extreme market stress.
Your yield comes from multiple sources: when the protocol stabilizes risky leveraged positions, it sells wstETH collateral and any price gains can generate a profit. It also receives a share of protocol fees, including transaction fees, liquidation rewards, unused slippage, and all collateral yield.
