USDx

Detailed Explanation of USDx (Dollars Token)

Overview

USDx is the object of stabilization for the USD synthetic asset in Dollar Protocol.

When USDx is trading > $1.05 according to the 12H TWAP, a supply delta is calculated.

Δ=(x12Hcpi)TS/rlagΔ = (x_{12H} - cpi) * TS / r_{lag}
  • x_12H represents the 12H TWAP price of USDx

  • TS represents the total supply of USDx

  • CPI represents the price index of the pegged assets. In this case it is USD

  • r_lag represents the rebase lag, a governance parameter that serves as a smoothing factor to decrease supply-side volatility

Positive Rebase

Let's take the following example of a positive rebase.

  • x_12H = $1.50

  • TS = 15,000,000

  • CPI = $1

  • r_lag = 7

The supply delta in this case would be (1.50 - 1.00) * 15,000,000 / 7 = 1,071,428.57 USDx. In this rebase period, around 1.07M USDx would be minted and distributed to protocol stakeholders.

Negative Rebase

Conversely, let's look at an example of a negative rebase:

  • x_12H = $0.90

  • TS = 15,000,000

  • CPI = $1

  • r_lag = 7

The supply delta would be (0.90 - 1.00) * 15,000,000 / 7 = 214,285.71 USDx.

If you have 1000 USDx in your wallet, un-bonded (we will talk about this later in the xBond section), you would see 14.28 USDx debase from your wallet, with a final balance of 985.72 USDx.

1000 USDx / 15,000,000 total USDx * 214,285.71 USDx = 14.28 USDx

The USDx Debase will eventually be discontinued once the protocol matures past its bootstrapping phase. This will be explained more in the roadmap section with composability.