Offchain strategies

A major part of sUSX’s yield comes from our partnered trading firm which operate market-neutral strategies (strategies uncorrelated to crypto market movements).

Our Partners

Our current partner is an established trading firm and has been active in both TradFi and crypto since 2020. The team has a very strong mix of trading, quant, and tech backgrounds.

Over the past five years, they have experienced virtually no losses, except during the FTX collapse, which resulted in a low single-digit percentage drawdown.

On the risk side, capital provided to the trading firm is governed by contractually structured loan agreements that are designed to preserve deployed principal. Additionally, we'll also publish transparency reports every two weeks for all users.

Some of the arbitrage strategies which they use are:

• Basis Trading: Capturing price discrepancies between spot and futures markets

• CEX-DEX Arbitrage: Capturing price differences between centralized and decentralized exchanges

• CEX-CEX Arbitrage: Leveraging pricing inefficiencies across multiple centralized exchanges

• Statistical Arbitrage: Utilizing quantitative models to identify and capitalize on temporary market inefficiencies

• Calendar Spread Arbitrage: Capitalizing on mispricings between futures contracts of different expirations

---

Offchain Verification

Offchain strategy performance is verified through an external proof-of-reserves platform. It uses zero-knowledge proofs, trusted execution environments (TEEs), and verifiable Merkle trees to verify and confirm asset balances without revealing private data. This integration provides trustless, privacy-preserving transparency into USX's offchain yield component. We'll announce the platform soon.

FAQs

Who is the trading firm we’ve partnered with?

Our current partner is an established trading firm and has been active in both TradFi and crypto since 2020. The team has a very strong mix of trading, quant, and tech backgrounds.More info here: Our Partners.

Why don't you have a custodian?

USX doesn't use a traditional custodian. Instead, it relies on an external proof-of-reserves platform for real-time, cryptographic verification of offchain reserves. We'll be able to privately prove that offchain balances exist and that principal value has been maintained without requiring custody or exposing sensitive trading data.

How do we know the money is safe with the trading firm?

Scroll maintains a legal loan contract that protects the principal amount. Additionally, we’ll also conduct regular due diligence through third-party transparency reporting to ensure fund safety.

How can I get my money back from this trading fund? (i.e. redemption process)

When you request to redeem sUSX to USX, USX.Capital manages the entire withdrawal process from its trading partners back to the protocol. Capital deployed in offchain strategies cannot be recalled instantly, as trading positions need to be systematically unwound to preserve principal and minimize slippage. The redemption (sUSX → USX) process takes 15 days to complete.

Redeeming USX → USDC separately takes 14 days. Alternatively, you can burn sUSX directly for USDC, which takes 15 days.

Note: Instant redemptions for both sUSX → USX and USX → USDC are available through liquidity pools, but swap fees apply.