USDX was created to aid in the expansion of the DeFi ecosystem: CEO of Hex Trust

USDX, the first native stablecoin introduced on Flare Network by HT Digital Assets, was created in response to the growing need in decentralised finance (DeFi) for a natively-issued dollar-pegged 1:1 dollar-backed asset.

Tether (USDT) is under compliance stress due to the Markets in Crypto-Assets Regulation (MiCA). In an interview with Cointelegraph, Hex Trust co-founder and CEO Alessio Quaglini describes how USDX wants to be a key stablecoin for DeFi applications.

As a stablecoin and gas token in the Flare ecosystem, USDX is fully backed by cash and cash equivalents, including short-term Treasury bills (T-Bills).

Quaglini claims that "HT Digital Assets, Hex Trust's tokenisation ecosystem, is what makes USDX the first native stablecoin on the blockchain for data, Flare."

In order to become "a reliable asset for users," the CEO of Hex Trust stated that USDX will establish itself as a key stablecoin in DeFi and "aims to integrate further within DeFi applications."

What distinguishes USDX from other stablecoins?

"USDX is a stablecoin that references the US dollar 1:1 and is designed to be fully backed by cash and cash equivalents. These reserves, which are mostly made up of 1-3 month T-Bills, "are securely held within the confines of global, tier-1 financial institutions," according to Quaglini, in order to guarantee the stability and value of the stablecoin for its holders.

Additionally, USDX will be usable "on Clearpool's T-pool to generate rewards," a decentralised liquidity pool (LP) built into the Clearpool protocol that is intended to make yield production through stablecoin deployment easier.

He added that despite the stablecoin's possible Quaglini features, it might encounter "regulatory hurdles in different jurisdictions" and market rivalry from well-known stablecoins, such as the regulated Circle USD (USDC).

Flare functionality and yield generation

Yield generation provides holders with a variable or set interest rate, or "yield," through the USDX T-Pool on Clearpool. It is frequently compared to interest on savings in the TradFi market.

The stablecoin's integration with "FAssets" will allow users to employ non-smart contract tokens like Bitcoin (BTC) in DeFi for yield and crosschain bridging, according to the CEO of Hex Trust, who also stated that holders could earn rewards in both USDX and FLR without lock-up periods.

As a native stablecoin and gas token, HT Digital Assets is introducing USDX on Flare to serve as "a building block for DeFi and bridging ecosystems," according to Quaglini.

"USDX offers a stable foundation for innovation on the network, from lending and borrowing protocols to perpetual futures exchanges and Flare Labs’ FAsset system," he stated.

USDX and FAssets

According to Hugo Philion, CEO of Flare Labs and co-founder of Flare Network, the need for a domestically produced dollar-pegged 1:1 dollar-backed asset spurred the creation of USDX.

According to Philion, USDX is a crucial component of the Flare ecosystem and can generate yield from Clearpool "while locked in agent vaults as cUSDX." Quaglini has called USDX a "foundational asset" for the DeFi ecosystem.

FAssets cannot be published until the Flare Times Series Oracle has a stable pricing for USDX, the CEO of Flare Labs stated, but this yield prospect "makes the FAsset system far more economically desirable from the agent perspective."

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