# Yield Explanation

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*](https://www.binance.com/en/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.<br>


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