fxUSD

Overview

fxUSD is a dollar-pegged token issued on Ethereum by f(x) Protocol, a product of Aladdin DAO. It is minted when a trader opens a leveraged position, and the protocol creates the fxUSD that funds that leverage.

How it is created

A user opens an xPOSITION and the protocol mints "the required amount of fxUSD to manage volatility and maintain full collateralization". A 7x position has one unit of xPOSITION backed by six units of fxUSD. A second route, fxMINT, lets a depositor borrow fxUSD against wstETH or WBTC at 0% annual interest, with a one-time fee on opening and closing.

Supply expands when traders open leveraged exposure and contracts when they close it. The peg is to the US dollar, the backing entirely crypto collateral.

Sources: f(x) Protocol docs, Creating a Leveraged LONG Position (xPOSITION), f(x) Protocol docs, fxMINT: borrowing fxUSD against your BTC and ETH, f(x) Protocol docs, Key Functions of f(x)

Backing and reserves

What backs it

The fxMINT page states the protocol "only uses wstETH and WBTC as collateral", and WETH deposits are swapped to wstETH on the way in. f(x) describes its V2 stablecoin as one that "Is 100% on-chain and doesn't rely on RWA".

What there is to read

No custodian, no bank account and no attestation firm sit behind fxUSD, so no reserve report exists to check. f(x) publishes fxUSD at 0x085780639CC2cACd35E474e71f4d000e2405d8f6 in its own documentation.

Backing does not all rest inside f(x) contracts. The risk parameters set an Aave deposit cap of 80% for both USDC and wstETH, so most of the stability pool's USDC and of the wstETH collateral can be deployed into lending markets.

Code review

The docs list Secbit reviews from June 2023 to March 2026. OpenZeppelin reviewed AladdinDAO/fx-protocol-contracts at commit 56a47ea from March 27 to May 5, 2025 and found 46 issues in total (1 critical, 2 high, 7 medium, 13 low, 23 notes), of which 5 were resolved.

Sources: f(x) Protocol docs, fxMINT: borrowing fxUSD against your BTC and ETH, f(x) Protocol docs, Abstract, f(x) Protocol docs, Contracts (fxUSD address list), f(x) Protocol docs, Risk parameters, f(x) Protocol docs, Audit Reports, OpenZeppelin, f(x) v2 Audit

Peg behaviour

Five layers of defence

f(x) documents peg protection as five incremental mechanisms:

• Opening and closing positions creates buying and selling pressure on fxUSD.
• The stability pool holds fxUSD and USDC, and buys fxUSD when it trades below a threshold, priced off Chainlink.
• When USDC in the stability pool falls below 5%, a first layer of funding cost is applied to positions.
• When the 42-minute EMA for fxUSD on Curve falls below $0.998, minting stops and the borrowing cost on position collateral becomes 10x the Aave borrowing cost of USDC.
• Anyone can then buy fxUSD at market and redeem it for $1 worth of wstETH or WBTC at a 0.5% fee, which the docs describe as setting "a hard floor for fxUSD's price at $0.995".

The registry price for fxUSD is $0.9977, a first-party read carried by the map itself. The threshold the protocol acts on is a different measure, the 42-minute EMA of the Curve fxUSD/USDC pair.

Sources: f(x) Protocol docs, Advanced Peg Protection Mechanisms, f(x) Protocol docs, Risk parameters, f(x) Protocol docs, Stability Pool

Risks

One address holds most of the supply

Fewer than 1,000 addresses hold fxUSD, and roughly 91% of supply sits in the single largest one. That is why the map's premint guard names fxUSD explicitly.

Supply depends on leverage demand

fxUSD exists as a byproduct of leveraged positions. Parameters set the rebalance line at 88% LTV and the liquidation line at 95%, over a leverage range of 1.1x to 7x. Rebalancing burns fxUSD to pull a position back to target LTV, so a sharp collateral drawdown shrinks the float.

Parameters can move

The documentation states that these parameters are "adjustable by governance", including the 88% rebalance line and the 0.5% redemption fee that sets the $0.995 floor.

What the audits found

OpenZeppelin's critical finding was that an attacker could lock user funds through the redeem function by exploiting recursive node structures without minimum debt requirements. Its two high findings were flash loans blocked by incorrect fee validation, and price oracles open to manipulation through single-pool attacks. All three were resolved. Thirteen low-severity findings were not.

Sources: f(x) Protocol docs, Risk parameters, f(x) Protocol docs, Rebalancing the Position (Liquidation Brake), OpenZeppelin, f(x) v2 Audit

What this map tracks

What the map reads

The Global Stablecoin Map tracks fxUSD from the Ethereum contract 0x085780639CC2cACd35E474e71f4d000e2405d8f6, the address f(x) publishes in its contract list. Registry supply is 62,606,750.7 fxUSD and the registry price is $0.9977, both first-party readings held by the map rather than sourced from an aggregator. The holder count sits just under 1,000 and moves daily.

Where the coverage stops

The registry lists Ethereum and Base, and the entire recorded supply sits on Ethereum. f(x)'s risk parameter page carries a separate set of limits for Katana chain, which the map does not track. The map reads the fxUSD token. It does not read the wstETH and WBTC collateral behind it, the stability pool's USDC balance, or the protocol's Aave positions, none of which appear in the stablecoin explorer.

Sources: f(x) Protocol docs, Contracts (fxUSD address list), f(x) Protocol docs, Risk parameters (Katana-specific limits)

Common questions