❓USDX FAQ

1. What is the mint/investing process for USDX issuance?

Acquiring USDX can be achieved in a couple of ways. If you are a key industry player, financial intermediary, or professional investor of a certain stature and meet the requisite criteria, you can directly mint USDX through authorized merchants such as Clearpool and HT Markets. Additionally, you can apply to become an authorized merchant to facilitate USDX issuance.

Please note that USDX cannot be minted directly by retail customers.

Alternatively, you can obtain USDX through secondary markets. USDX is listed on platforms such as Bitmart, where it is supported by substantial liquidity. This provides an accessible and convenient option for individuals interested in acquiring USDX. However, it is essential to conduct thorough research and ensure the credibility of the exchange you choose to use.

2. How do you mint USDX?

Direct Mint:

• By depositing eligible Real-World Assets (RWAs) into the protocol, users can receive an equivalent amount of USDX on a 1:1 basis.

Indirect Mint:

• By depositing USDC or other eligible stablecoins into the protocol, users can receive USDX on a 1:1 basis. In this method, our authorized merchants supply the necessary RWA collateral, allowing users to obtain USDX without directly holding RWAs.

3. What is the OTC redemption process for large USDX holders?

The OTC redemption process for large USDX holders operates similarly to any other USDX redemption. It is facilitated through our authorized merchants and typically involves a T+2 redemption time period.

USDX tokens can be redeemed in two ways:

• Withdrawal of Underlying Assets:

  • Users can withdraw the Real-World Assets (RWAs) underlying the USDX token directly through authorized merchants, Hex Trust and Clearpool.

• Secondary Market Transactions:

  • Users can sell USDX for USDC or USDT on the secondary market. Since USDX is fully redeemable through authorized merchants, the 1:1 peg is expected to be maintained through arbitrage mechanisms, similar to other fiat-backed stablecoins.

4. Will OTC redemptions be supported on L1 and L2?

OTC redemptions will be supported across both L1 and L2 via the designated partners (Hex Trust or Clearpool).

5. How do the peg-stability and rebalancing mechanisms work and how often would rebalancing occur?

USDX is designed to maintain a 1:1 peg with the U.S. dollar through a combination of robust mechanisms involving real-world asset (RWA) backing and secondary market dynamics.

Peg-Stability Mechanisms:

• Collateralization:

  • Each USDX token is backed by high-quality financial instruments, such as government bonds or other eligible financial instruments, ensuring the token's intrinsic value aligns with its pegged value.

• Authorized Merchant Network:

  • Authorized merchants, including Hex Trust and Clearpool, play a critical role in minting and redeeming USDX. This provides market participants with direct access to the underlying assets, enabling arbitrage opportunities that stabilize the peg.

• Market Arbitrage:

  • Traders leverage price discrepancies between USDX and its underlying assets or other stablecoins to maintain the peg. For example, if USDX trades below $1, arbitrageurs can purchase it at a discount and redeem it for the equivalent value in RWAs, driving the price back to parity.

Rebalancing Mechanisms:

• Dynamic Collateral Adjustments:

  • To ensure sufficient backing, the protocol monitors the valuation and performance of RWAs continuously. If market conditions change or collateral values fluctuate, adjustments are made to maintain an optimal collateralization ratio.

• Secondary Market Supply and Demand:

  • The protocol may interact with the secondary market to influence supply or demand when required, enhancing price stability.

Frequency of Rebalancing:

• Rebalancing typically occurs dynamically based on real-time market conditions and collateral performance, but periodic reviews are conducted to ensure long-term stability. While there is no fixed schedule, rebalancing may be triggered by specific thresholds, such as deviations in the peg or changes in RWA valuation.

6. How regularly will ozUSD/wozUSD yields be distributed?

Regular 24-hour intervals.

7. How regularly are internal audits regarding off-chain reserves undertaken?

Monthly external audits to ensure sufficient reserves to back USDX.

8. Via Stargate’s Transmuter contract that allows for 1:1 swaps for USDC.e <> USDX, how will Hex Trust maintain liquidity and rebalance this contract?

Hex Trust will rely on its network of authorized merchants to manage liquidity and ensure the proper rebalancing of the Stargate Transmuter contract. These authorized merchants have direct access to mint and redeem USDX, enabling them to maintain a consistent 1:1 swap ratio between USDC.e and USDX.

Liquidity Management:

• Authorized merchants will monitor the demand for swaps and adjust liquidity in the Transmuter contract by minting or redeeming USDX as needed. This ensures that the contract has sufficient funds to handle user transactions efficiently.

Rebalancing Mechanism:

• If there is excess USDC.e in the contract: Merchants may use the surplus to mint additional USDX and deposit it back into the ecosystem.

• If there is a shortage of USDC.e or USDX: Merchants can redeem USDX or mint new USDX (via eligible collateral) to restore the balance, ensuring smooth operation of the 1:1 swap mechanism.

Ongoing Monitoring:

• Hex Trust, in collaboration with its authorized merchants, will continuously monitor swap activity and market conditions to proactively address any imbalances, maintaining the peg and seamless functionality of the Transmuter contract.

This robust setup ensures liquidity and stability, enhancing user confidence in the USDC.e <> USDX swap process.