Flux USD (fUSD)

What is Flux USD (fUSD)?

fUSD is the 1:1 USD-pegged stablecoin issued by Flux. It is fully decentralized, overcollateralized, and backed only by XRD and LSULP.

Unlike most competitors, fUSD is designed for resilience:

• Only backed by crypto assets—no real-world assets or centralized custody.

• Directly redeemable—always convertible in a fast and liquid way.

Why fUSD instead of other stablecoins?

• fUSD is backed only by the most decentralized assets: XRD and LSULP.

• It is always redeemable for its underlying assets, meaning it can be swapped 1:1 for the collateral backing it (for a small fee).

• Flux Reservoirs allow fUSD holders to earn real yield on their deposited fUSD .

• ILIS DAO support ensures the smart contracts are protected and governed in a decentralized way, and liquidity providers of fUSD are rewarded using protocol generated interest.

How does fUSD stay pegged?

Flux uses a market-driven approach with user-set interest rates to dynamically maintain the peg.

If fUSD trades above $1

• Borrowers reduce rates to minimize redemption risk.

• Lower rates make borrowing fUSD less attractive, pushing the price back down.

If fUSD trades below $1

• Arbitrageurs redeem fUSD for collateral, reducing supply and increasing price.

• Borrowers face higher redemption risk and raise rates, boosting fUSD demand and deposits.