Yield Explanation

Exploring How sUSDX Distributes the Protocol's Yield to Users

By staking USDX and in exchange receiving sUSDX, users can partake in the yield generated by the protocol. This process is designed to be seamless, requiring no additional actions or incurring costs post-stake.

Overview

The quantity of sUSDX allocated to a user is influenced by the volume of USDX staked and the timing of such staking. Employing a "Token Vault" strategy, akin to that used by Binance for WBETH.

usdx.money's system ensures that staked USDX is not rehypothecated, lent, or employed in any capacity beyond its intended purpose. This is because the protocol yield is intrinsically generated by the USDX backing mechanism, allowing usdx.money to distribute yields effortlessly to its users. As such, the USDX value encapsulated within sUSDX naturally appreciates over time. Upon unstaking, users are awarded their original USDX amount plus a proportional share of the protocol yield that has accrued in the staking contract during the period of staking, as evidenced by the increased value of sUSDX.

Important Notes

• When staking USDX for sUSDX, the amount of sUSDX received may appear smaller in quantity but will be equivalent in USDX value. This effect stems from the "Token Vault" approach and the specific ratio used in the mechanism, as illustrated in the example provided.

• The USDX value is engineered to consistently equate to approximately one synthetic USD, whereas the USDX value of sUSDX is set to incrementally rise due to the protocol's daily yield contributions to the staking contract.

• In the event of a loss resulting from funding issues or other factors, the usdx.money insurance fund is designated to cover such losses, ensuring that the staking contract is shielded from these impacts.

Staking users are guaranteed either a positive or neutral yield when staking USDX for sUSDX. Should negative funding lead to a decrease in protocol yield, the usdx.money insurance fund is committed to absorbing the loss, safeguarding the interests of the stakers.