# What is USX? ## What is USX? USX is a fully collateralized stablecoin pegged 1:1 to the US dollar and built on [Scroll](https://scroll.io). There are two core tokens: USX (the stablecoin) and sUSX (yield-bearing staked version). USX maintains its dollar peg through 1:1 redeemability with USDC and is designed for payments, lending, borrowing, and yield generation across the Scroll ecosystem. ### The Two Tokens #### USX: The Stablecoin USX maintains a stable 1:1 peg to the US dollar and is always redeemable 1:1 with USDC. It's designed as a stable unit for payments, lending, borrowing, and liquidity provision within the Scroll ecosystem. #### sUSX: Yield-Bearing Staked USX sUSX is the yield-bearing version created by staking USX. When you stake USX, you receive sUSX which represents your share of the protocol's yield-generating vault. Users earn up to 10% APY automatically just by holding sUSX - no additional action required. ### How USX.Capital Generates Returns USX generates yield through multiple onchain strategies deployed across DeFi protocols via [Blend's](https://blend.money) execution layer. Funds are deployed across lending, yield-tranching, and liquidity provision while hedging risk to generate stable, predictable returns. #### Diversified Strategy Approach Returns come from: * Lending protocols (Aave, Morpho, and others) * Yield-tranching platforms (Pendle) * Liquidity provision across multiple pairs * Delta-neutral hedging to reduce volatility Current allocations are updated live on the [USX dashboard](https://usx.capital/dashboard). This diversification reduces risk and ensures a sustainable return profile across market conditions. #### Target Yield USX targets an estimated up to 10% annual return based on onchain strategy performance. This represents intrinsic yield generated purely from strategies and not from token rewards or incentives. Past performance does not guarantee future results. ### Key Use Cases #### Lending and Borrowing USX will be accepted as collateral on Scroll Lend (Scroll's native money market), enabling users to loop their positions for higher yields. #### Yield and Points Trading USX and sUSX will be supported on platforms that allow users to tokenize and trade yield exposure, providing additional liquidity opportunities. #### Providing Liquidity By providing liquidity to USX trading pairs, you earn passive income through trading fees. These trading fees are swap fees through DEXs. #### Redemption and Stability Direct 1:1 redemption (up to 14 days) is available for institutional partners. To initiate, contact `usx_operation [at] scroll [dot] io`. Regular users can exit by swapping USX → USDC instantly via [Scroll Swap](https://swap.scroll.io/swap). ### Capital Protection: The Reserve Fund USX.Capital maintains an onchain reserve fund specifically designed to cover potential losses from yield strategies, protecting both the protocol and users from unexpected drawdowns. #### Reserve Fund Details * **Initial Funding:** $5 million worth of SCR * **Allocation:** 50% of the 10% protocol fee is directed toward building this reserve * **Minimum Coverage:** 2% of all deployed principal, with no current cap on size * **Role:** Acts as an insurance buffer against strategy underperformance * **Transparency:** The reserve fund contract is and verifiable at . *** ### Common Questions **Q: What's the difference between USX and sUSX?** A: USX is a stable stablecoin pegged 1:1 to the dollar with no yield. sUSX is the yield-bearing version that accrues up to 10% APY, automatically when held. **Q: Is USX always redeemable?** A: Yes. Institutional partners can redeem USX 1:1 for USDC directly (up to 14 days, via `usx_operation [at] scroll [dot] io`). Regular users can swap USX → USDC instantly via [Scroll Swap](https://swap.scroll.io/swap) at market price. **Q: How is the reserve fund used?** A: The reserve absorbs losses from yield strategies before impacting sUSX holders. It acts as an insurance buffer. **Q: Can I lose my principal?** A: USX principal is protected through collateralization and the reserve fund. sUSX may experience drawdowns if strategies underperform, though reserves help mitigate this. **Q: Where does yield come from?** A: Yield comes from onchain strategies (Aave, Morpho, Pendle, etc.) managed through Blend, not from token incentives. *Please note that USX and sUSX each bear certain risks, given their complex nature. You should not mint or interact with these components if you are unfamiliar with cryptocurrencies or the risks involved. For our full risk disclosure statement, please refer to* [*important legal disclosures and risk disclaimers*](https://docs.usx.capital/resources/terms-of-service)*.*