Buy and sell fxUSD with zero exchange fees

We are happy to announce today the addition of fxUSD to the list of cryptocurrencies supported in our service.

Starting today, you can buy fxUSD with dollars, euros, Swiss francs and more, and cash out fxUSD back to your bank account. Both with absolutely no conversion fee!

If you've never heard of fxUSD before, you're in the right place. In this article, we explain what fxUSD is, how it works under the hood, and why it stands out among stablecoins.

What is fxUSD?

fxUSD is a USD-pegged stablecoin issued by f(x) Protocol, a DeFi protocol built on Ethereum. Like other dollar stablecoins like USDC or USDT, fxUSD is designed to maintain a stable value of approximately $1 at all times.

But unlike centralized stablecoins that are backed 1:1 by dollars sitting in a bank account, fxUSD uses a more sophisticated mechanism to achieve its stability, which doesn't rely on a centralized company holding its reserve but on a reserve of wstETH (Lido's yield-bearing wrapped ether token) and WBTC instead.

How does fxUSD work?

fxUSD is what's known as an overcollateralized stablecoin: f(x) Protocol lets users deposit wstETH or WBTC as collateral and mint fxUSD against it.

Think of it like a mortgage: you deposit your asset and take out a loan in fxUSD. But unlike a traditional mortgage, there is no interest rate; just a one-time fee (0.5% to open, 0.2% to close).

And instead of the bank repossessing your collateral if prices drop, the protocol gently rebalances your position to keep it healthy.

How the fxUSD peg is maintained

The Stability Pool is the core mechanism that keeps fxUSD pegged to $1. It holds fxUSD and USDC deposited by users, and acts as a liquidity buffer. When fxUSD deviates from $1, the pool automatically arbitrages the deviation: buying fxUSD when it drops below $0.998, selling when it rises above $1.002. Stability Pool depositors earn yield from this activity: opening/closing fees from borrowers, and collateral staking yield mostly.

No hard liquidations

Traditional CDPs like MakerDAO liquidate your entire position if your collateral ratio drops too low. f(x) Protocol takes a different approach: when a position's LTV reaches 88%, the protocol burns a portion of the fxUSD debt to bring the ratio back to a safe level. Most of your collateral stays yours. Hard liquidation only triggers at 95% LTV as a safety net, but the rebalancing mechanism makes this extremely rare.

Backed by yield-bearing collateral

The collateral behind fxUSD is productive: wstETH generates staking yield and WBTC tracks Bitcoin. This yield flows to the Stability Pool, which is what pays fxSAVE depositors their APY.

Decentralized and non-custodial

fxUSD is governed by smart contracts on Ethereum. No single company controls the reserves. The protocol is governed by a 6/9 multisig with a 3-day timelock; the team doesn't even hold quorum as external public signers are part of it.

A separate 3/4 emergency multisig can pause the protocol if needed. The protocol operates transparently and openly on-chain, and anyone can verify the collateral backing fxUSD at any time.

Why Is fxUSD Interesting?

fxUSD brings several features that make it worth considering as part of your crypto strategy:

• An innovative approach to stability: fxUSD uses real onchain collateral (wstETH and WBTC) with a structured Stability Pool. The system is always overcollateralized: there is more collateral backing fxUSD than the value of fxUSD in circulation. The stability pool ensures a reliable price execution without depending on third parties like market makers.
• Capital efficiency: the unique rebalance system let users borrow more with the same collateral than on other venues.
• No centralized issuer risk: Traditional stablecoins like USDT and USDC depend on a company holding real dollars in a bank. If that company faces legal issues, freezes funds, or becomes insolvent, your stablecoin could be at risk. fxUSD removes this dependency through decentralized, on-chain collateral management. The protocol uses a rebalancing mechanism instead of hard liquidations: when a position's LTV reaches 88%, it burns a portion of the debt to bring the position back to safe levels, protecting both the borrower and the peg.
• Transparent and verifiable: Because everything happens on-chain via smart contracts, the collateral and protocol mechanics are fully auditable by anyone, at any time. No need to trust a quarterly audit report from a private company.

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