A super condensed closing summary on each of the previously presented topics.
Understanding the previous series of articles will make you an advanced beginner, or even intermediate user of USDx and other systems like it, before the platform is even launched. You can now safely participate in the protocol, with a full view of what to monitor, and how to participate most effectively given the particular angle you wish to approach the system from.
USDx serves four main user types, each with distinct priorities:
USDx Traders: Use it as a stable store of value, focus on liquidity and peg stability
USDx Leverage Traders: Use loans to amplify gains, monitor liquidation levels and redemption risk to maintain collateral exposure
USDx Yield Speculators: Focus on yield opportunities through LP rewards and Backstop Pool
USDx Arbitrageurs: Capitalize on peg deviations and liquidation opportunities
Loan management is central to USDx:
Minimum collateral requirement: $2,500 worth
Key metrics: Liquidation Price, Safety Buffer, MCR/CCR ratios
Monitor three main risks: Redemptions, Liquidation Risk, Recovery Mode
Keep loan health above CCR (150%) for maximum safety
Watch redemption queue position to maintain collateral exposure
The Backstop Pool is a key source of system health and rewards:
Pool holds USDx for liquidations
Rewards include ORX inflation and discounted collateral rewards during liquidations
Liquidator reward: 200 USDx + 0.5% of collateral for pressing a button
ORX Rewards vest like TitanX deposits in ORX Minter
Compound your USDx regularly, as the amount of USDx you deposit is not a static entity, and will be changed by liquidations!
Peg stability maintained through multiple mechanisms:
Soft pegging: Natural market forces and $1 Schelling point
Hard pegging: Profitable arbitrage opportunities above/below $1
Redemption process includes escrow period
Failed redemptions possible if loan sizes don't align
Redemptions progress from least to most collateralized loans
Buy USDx below $1, and profit.
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