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Everything you need to know about XUSD
Uruba Niazi

VP of Marketing - Content

03 May 2024
3 min read
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This blog will take you through everything you need to know about the XUSD stablecoin and what makes it the best choice for users.

The CrossFi ecosystem revolutionizes the cryptocurrency transaction experience through its non-custodial payments and banking features. Unlike traditional banking services, where third parties manage user funds and expose users to fractional reserve banking, CrossFi empowers users with complete control over their crypto assets. Our system runs on our native coin and we have introduced XUSD stablecoin for safe and fast use within our ecosystem. This blog will take you through everything you need to know about the XUSD stablecoin and what makes it the best choice for users. 

The XUSD is an algorithmic stablecoin tied to the value of the US dollar, operating within the CrossFi Network. XUSD will be backed by XFI and other digital assets will be added in the future. It is designed to maintain a 1:1 peg with the USD through a collateralization mechanism. Users can mint XUSD by collateralizing 300% of the desired amount in XFI. Minted XUSDs can be used for various purposes, such as asset storage, purchasing other tokens, etc. Suppose a user’s collateralization position becomes unhealthy, with the price of XFI dropping below 200% of the minted XUSD amount. In that case, the position is liquidated, using collateralized XFIs to pay for XUSD and liquidation fees.

How can I use XUSD?

XUSD is the preferred method of payment within the CrossFi App. Holding and spending XUSD can bring you earnings, utility, and rewards.

  • Pay for anything in XUSD via the CrossFi APP anywhere in the world, as with a regular stablecoin.
  • Invest XUSD further in other cryptocurrencies.
  • Send XUSD to lpUSD and earn in xAPP: Earn commission in XAPP and receive XFI rewards.

What is the difference between popular Stablecoins?

USDT and USDC are two of the most used stablecoins in crypto today. They are backed by Tether Ltd and Coinbase Inc, respectively. Both those companies are exposed to regulatory scrutiny and can be shut down or banned. The ability of the coin to maintain its value depends on these companies keeping a balanced reserve of fiat currency and assets. This balance has failed in the past, with USDT dropping to $0.88. The volatility of the global fiat market directly affects these stablecoins, negating the fact that cryptocurrencies should be independent of global economic pressures. Due to these factors, CrossFi created a better stablecoin for use in the CrossFi ecosystem.

Why is XUSD better than other stablecoins?

  • It is stable and backed by reserves of 1:3. This is three times higher than other stablecoins.
  • Protection against inflation, thanks to the mechanism of collateralization.
  • Fully transparent reserves, confirmed by smart contracts, imitated by users.
  • There is no risk of third parties freezing or regulating users’ assets.
  • Thanks to the collateral mechanism, an increase in the amount of XUSD in the market increases the XFI deficit.
  • XFI holding, withdrawal at any time.

Details »»» https://docs.crossfi.org/crossfi-xapp-1/feature-guide/xusd 

Summary

XUSD represents a significant advancement in stablecoin technology, offering users stability, transparency, and autonomy within the CrossFi ecosystem. With its innovative approach to stablecoin issuance and management, CrossFi sets a new standard for financial freedom and security in the world of cryptocurrency.

Compared to popular stablecoins like USDT and USDC, XUSD offers several distinct advantages. It boasts a higher collateralization ratio of 1:3, providing greater stability and protection against inflation. Additionally, XUSD reserves are fully transparent and confirmed by smart contracts, ensuring reliability and trustworthiness for users. Unlike other stablecoins, XUSD eliminates the risk of third-party intervention or asset freezing, offering users unparalleled control over their assets within the CrossFi ecosystem.

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