XUSD, a stablecoin with the ticker XUSD, operates on the Ethereum blockchain, a decentralized platform known for its robust security and smart contract capabilities. The Ethereum blockchain is a public ledger that records all transactions in a transparent and immutable manner, ensuring that once data is written, it cannot be altered or deleted. This immutability is crucial for maintaining the integrity of financial transactions and preventing fraud.
The Ethereum blockchain employs a consensus mechanism called Proof of Stake (PoS), which is designed to secure the network against attacks. In PoS, validators are chosen to create new blocks and confirm transactions based on the number of coins they hold and are willing to "stake" as collateral. This system makes it economically unfeasible for bad actors to gain control of the network, as they would need to own a significant portion of the total supply of Ethereum, which would be prohibitively expensive.
XUSD is not just limited to the Ethereum blockchain; it operates on multiple chains, enhancing its versatility and accessibility. This multi-chain operation allows users to bridge and exchange XUSD across different blockchain networks, providing greater flexibility and reducing dependency on a single blockchain's performance and security.
One of the standout features of XUSD is its status as a stablecoin aggregator. Unlike traditional stablecoins that are backed solely by fiat currencies, XUSD is partially collateralized by commodities and partially algorithmic. This hybrid model aims to provide stability while leveraging the benefits of decentralized finance (DeFi). The algorithmic component helps maintain the peg to the United States Dollar by adjusting the supply of XUSD based on market demand, while the collateralized portion ensures that there is tangible backing for the stablecoin.
The smart contract for XUSD on Ethereum was first deployed in February 2024 by StraitsX. This deployment was a significant milestone, designed to facilitate swift, global, and 24/7 payments. XUSD aims to bridge ASEAN’s financial ecosystem with the stability of the world’s primary reserve currency, the US Dollar. Each XUSD is pegged to one United States Dollar, providing a stable value that is crucial for users who need to avoid the volatility typically associated with cryptocurrencies.
XUSD's compliance with regulatory frameworks is another critical aspect of its technology. The Monetary Authority of Singapore (MAS) has acknowledged XUSD as compliant with Singapore's upcoming stablecoin regulatory framework. This compliance ensures that XUSD operates within legal boundaries, providing users with an added layer of trust and security.
In the realm of DeFi, XUSD has carved out a niche for itself with its unique staking protocol. Users can stake their XUSD tokens to earn rewards, contributing to the network's security and liquidity. This staking mechanism not only incentivizes users to hold and use XUSD but also enhances the overall stability and robustness of the ecosystem.
The decentralized nature of XUSD ensures that no single entity has control over the stablecoin, aligning with the core principles of blockchain technology. This decentralization is achieved through a network of validators and smart contracts that automate processes and enforce rules without the need for intermediaries.