UXD Protocol update: UXP Live price, price chart, news and markets

The UXP price update as of now is $0. In the previous 24 hours, its trading volume was $0, and its value has increased by %. As of now, UXP's live market cap is $0, and it is ranked as the #24135 on the Coincu. UXP has a circulating supply of 256,701,581 and a maximum supply of 256,701,581.

The Basics of UXD Protocol The UXD Protocol is a decentralized stablecoin minting protocol that operates on the Solana ecosystem. It introduces the UXD token, which is designed to maintain a fixed value of 1 USD without any bias. Main Features of UXD Protocol UXD Protocol offers several unique features that differentiate it from other stablecoin protocols: Stability against USD With UXD, users have the assurance that they can always exchange 1 UXD for 1 USD. In situations where the value of UXD deviates from the USD, traders can identify arbitrage opportunities with zero risk and bring it back to 1 USD. Optimizing Capital Efficiency The UXD protocol allows users to create 1 UXD by utilizing 1 USD worth of their cryptocurrency assets. This approach ensures that the protocol remains 100% capital efficient. In contrast to other stablecoins that are native to cryptocurrency, UXD does not require excessive collateralization, enabling greater capital efficiency. Addressing Problems with UXD Protocol Maintaining a Delta-Neutral Position In order to ensure that the value of UXD remains fixed, the UXD Protocol executes a "Short order" for BTC/USD on a decentralized derivative dex. The amount of this order corresponds to the quantity of UXD in circulation. This strategy, known as a "Delta-Neutral Position," safeguards the UXD protocol from fluctuations in BTC prices. To understand the concept of a delta-neutral position, consider the following example: Assume that BTC is currently trading at $40,000. A user decides to mint 40,000 UXD by spending 1 BTC. This action increases the total circulation of UXD to 40,000. Subsequently, the UXD protocol takes a "short position" of 1 BTC, utilizing it as collateral on the derivative dex. The combined worth of this position and collateral will consistently amount to $40,000, thereby maintaining a neutral position. If the price of BTC rises to $80,000, the value of the collateral will increase from $40,000 to $80,000, resulting in a profit and loss (PnL) of $40,000. The PnL of the "short position" is 1 BTC - $40,000, leading to a total PnL of 0 USD. If the BTC price drops to $20,000, the value of the collateral will decrease from $40,000 to $20,000, resulting in a PnL of -$20,000. However, the PnL of the "short position" for 1 BTC is +$20,000. Consequently, the total PnL remains at 0 USD. Interest Payments UXD holders have the opportunity to earn interest through the funding rate when it is positive. Smart contracts ensure that the balance of UXD holders automatically increases by the corresponding interest amount. Insurance Fund An insurance fund is established to exempt UXD holders from paying interest when the funding rate is negative. The effectiveness of the insurance fund, denoted as X, is crucial: If X > 0, a negative funding rate can be covered using the insurance fund. If X < 0, the UXD protocol conducts a governance token auction (UXP) that is open to the public. The auction proceeds are utilized to replenish the insurance fund until X > 0. In addition to the UXP auction, a continuous positive cash flow is directed into the insurance fund when the funding rate is positive. This occurs as a portion of the funding rate is allocated to the insurance fund. Arbitrage Opportunities If the price of stablecoins varies from the price of fiat currencies, arbitrageurs can issue or repurchase stablecoins to earn risk-free profits, effectively stabilizing the price of the stablecoin. For example, if the UXD/USD trading pair is priced at 0.99, traders can purchase UXD with USD and exchange it for 1 USD worth of BTC, resulting in a profit of 0.01 USD. If the UXD/USD trading pair is priced at 1.01, traders can create UXD using BTC and sell it for 1.01 USD, once again earning a profit of 0.01 USD. These risk-free transactions promptly restore the pegged value of UXD to USD. Transparency and Verifiability The blockchain allows for the verification of the number of stablecoins in circulation and the quantity of supporting bitcoins. The following equation always holds true: USD value of BTC as collateral + USD value of "delta-neutral position" = total amount of UXD in circulation. Therefore, UXD holders will always be able to exchange their UXD for bitcoin. For more detailed information regarding UXD Protocol, please visit the following link: click here.