USDx is a monetary protocol launched by dForce. It is the first monetary protocol, which is decentralized and is a synthetic indexed stablecoin. It is backed by several stablecoins at pre-determined weights, which are adjustable through on-chain governance.
Initially, the USDx protocol reserve constitutes of four stablecoins. The component stablecoins along with their weighting are as follows: 30% USDC, 30% TUSD, 30% PAX, and 10% DAI. It is pegged at an equal proportion to a basket of component stablecoins, which can earn interest. Synthetization and disaggregation of USDx are completely based on-chain to make sure that there is maximum transparency, not susceptible to change, and is auditable.
U.S. dollar index (USDX) is a measurement of how much the U.S. dollar is worth in relation to the value of currencies of majority of the strategic trade partners of U.S. The worth of U.S. Dollar is weighed with these six currencies: the euro, Swiss Franc, Japanese Yen, Canadian dollar, British pound, and Swedish Krona. This value of the index shows the worth of Dollars in the world market.
The index is equipped with a strong peg and robust trust model and also can diversify risk to protect the system for unwanted elements. There are multi-layer risk buffers to detect and neutralize the effect of threat.
dForce Network has developed a money market, Lendf.Me. Here, USDx can be put to earn compound interest and there is also no lock-in period, so money can be withdrawn as and when required. It also gives the advantage of borrowing USDx by guaranteeing ETH to Lendf.Me at a modest rate for the purpose of leverage trading or just to pay bills.
dForce believes in developing and promoting blockchain-native decentralized finance projects and monetary protocols to serve as the main framework for Defi and open finance applications. dForce developed the first stablecoin and Defi protocol platform that obtained strategic financial backing from mainstream commercial banks.
Stablecoins are cryptocurrencies that have been designed to minimize the volatility in price by backing them up with some “stable” asset or group of assets. The exchange value of stablecoin can be fixed with a virtual currency, fiat money, or any exchange-traded commodity (like precious or industrial metals). Stablecoin, which can be redeemed by way of currency, commodities, or fiat currency, is known to be backed, and those that are associated with an algorithm are denoted as not backed.