xUSD
xUSD
Overview
xUSD is a decentralized onchain dollar issued by the HYPERMAX Lending protocol. It allows users to unlock liquidity from their portfolio—especially SmartFund and HyperBond tokens—without exiting positions.
xUSD maintains its dollar parity through a combination of overcollateralized debt positions and a Peg Stability Module (PSM) that accepts USDC at a 1:1 rate. This system ensures that xUSD remains highly liquid, composable, and backed by real onchain assets.
What Makes xUSD Unique
Built for Onchain Asset Management Mint xUSD using SmartFund tokens, USDC, or HYPE—turning investment exposure into borrowable capital.
Holds Its Peg via PSM & Arbitrage Peg maintenance is enforced through onchain arbitrage and the Peg Stability Module, not market makers or opaque reserves.
Productive Reserve Backing USDC deposited into the PSM is deployed into low-risk HyperBond strategies, allowing xUSD LPs to earn protocol-driven yield.
Fully Onchain & Overcollateralized Every xUSD in circulation is backed by more than $1 in real assets, visible and verifiable onchain.
How xUSD Maintains Dollar Parity
1. Peg Stability Module (PSM)
The Peg Stability Module allows anyone to:
Deposit USDC and receive xUSD at a 1:1 rate (minus a small minting fee, if applicable).
Redeem xUSD for USDC 1:1 (subject to available PSM liquidity).
This mechanism provides a hard floor and ceiling for xUSD price and keeps it tightly anchored to $1.
2. Arbitrage via CDP Minting
When xUSD trades below $1:
Arbitrageurs can buy xUSD at a discount, then redeem it via debt repayment, or use it in PSM swaps for profit.
This buying pressure pushes the price back toward parity.
When xUSD trades above $1:
Users are incentivized to mint new xUSD by opening CDPs, increasing supply and bringing the price back down.
How to Mint xUSD
You can mint xUSD in two ways:
1. CDP-Based Borrowing
Deposit Collateral (SmartFund tokens, USDC, HYPE)
Borrow xUSD based on an LTV ratio specific to the asset
Pay variable interest, accruing over time
All minted xUSD must be overcollateralized to maintain system solvency. Liquidation may occur if your position becomes undercollateralized.
2. Direct Swap via PSM
Swap USDC → xUSD at a 1:1 rate via the Peg Stability Module
No collateral ratio required
xUSD minted is backed by USDC held in reserve
USDC in the reserve is periodically deployed into HyperBond strategies to generate passive returns.
Use Cases
Borrowing Liquidity
Mint xUSD without selling your SmartFund or HyperBond tokens
DeFi Collateral
Use xUSD in CLMMs or other lending protocols
PSM Yield Farming
Earn native yield via HyperBond exposure when supplying USDC
Strategy Leverage
Stack multiple positions by looping collateral + xUSD borrow
Liquidation Overview
If a user mints xUSD via CDP and their health factor drops below 1.0:
Their position becomes eligible for liquidation.
A third-party liquidator repays a portion of their debt (in xUSD) and seizes a discounted portion of their collateral.
This ensures that all xUSD remains overcollateralized and system solvency is preserved.
Note: Liquidations follow the same mechanics as the broader HYPERMAX Lending protocol and are executed via Compound v2’s liquidation flow.
Why Use xUSD?
No Need to Sell: Stay invested while unlocking liquidity.
Peg Stability: Maintained trustlessly via PSM and arbitrage mechanics.
Composability: Use xUSD across the HYPERMAX ecosystem—CLMM, LPs, and beyond.
Yield-Generating Reserves: USDC in the PSM doesn’t sit idle—it earns.
Transparent & Onchain: All balances, backing, and activity are visible.
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