Add sUSDX on USDC and USDT markets on Arbitrum

Proposals
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Introduction

Stables Labs builds an innovative stablecoin infrastructure protocol that redefines the future of finance. Our next-generation platform seamlessly bridges DeFi, CeFi, and TradFi, offering decentralized, secure, and bankless solutions for stablecoin issuance.

Backed by industry leaders and leveraging state-of-the-art integrations of crypto and real-world assets, Stables Labs is at the forefront of the financial revolution. To date, blue-chip crypto investors have entrusted us with 45 million in growth capital at a 275 million valuation.

Our flagship product, USDX, is a delta-neutral stablecoin backed by centralized finance (CeFi) basis trade positions. Its staked counterpart, sUSDX, enables users to earn the underlying yield through an appreciating exchange rate relative to USDX.

Type: Collateral deployment

Authors: Stables Labs Team

Motivation

Unlike other delta-neutral stablecoins that primarily focus on blue-chip assets like BTC and ETH, USDX taps into the entire investable universe of crypto assets to capitalize on funding rate arbitrage opportunities, unlocking the potential for higher yields.

Moreover, the assets backing USDX do not interact with third-party DeFi protocols. This design choice enhances agility during extreme market conditions by reducing exposure to liquidity constraints and minimizing additional smart contract risks.

sUSDX is a leading delta-neutral stablecoin, currently ranked No. 2 by TVL in the “Basis Trading” category on DeFi Llama.

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As such, listing sUSDX as a collateral asset on Compound ARB offers several strategic advantages:

1. Expanding Collateral Options: Adding sUSDX would diversify Compound’s collateral offerings and mark the first yield-bearing, delta-neutral stablecoin available on these Arbitrum markets. This would allow users to unlock additional liquidity by leveraging their existing yield-generating stablecoin positions.
2. Minimized Liquidation Risk: Since sUSDX is a USD-pegged, yield-bearing stablecoin, using it as collateral in stablecoin markets presents minimal liquidation risk. Both the collateral and borrowed assets are denominated in USD, enabling lower-risk leverage strategies.
3. Increase Compound’s Borrowing Demand: By adding sUSDX as a collateral, Compound enables sUSDX-backed leveraged farming positions, which could attract greater borrowing demand for the relevant stablecoin markets. This would drive higher utilization of Compound’s loan book and increase supply rates for lenders.

Important Links

Next Steps

We invite the community to give their feedback and recommendations for the asset.

1 Like
sUSDX (Arbitrum) Asset Assessment
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This is the kind of innovation DeFi needs!
sUSDX isn’t just another stablecoin, it’s a smart leap forward. By tapping into delta-neutral strategies across the wider crypto asset landscape without relying on third-party DeFi protocols, Stables Labs is creating a truly agile and low-risk system.

Adding sUSDX as collateral on Compound ARB makes perfect sense, diversification, minimized liquidation risk, and new borrowing demand all in one move. Big win for the ecosystem.

Kudos to the Stables Labs team. Following this one closely

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The Stables Labs team welcomes @Gauntlet for any comments and risk parameters that it may recommend for this proposal.

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[Gauntlet] Recommendations for sUSDX on Arbitrum USDC and USDT Comet

Simple Summary

Should the community choose to onboard sUSDX on the Compound USDC and USDT Comets on Arbitrum, we recommend the following initial parameter recommendations:

Risk Parameters

Asset Collateral Factor (CF) Liquidation Factor (LF) Liquidation Penalty (LP) Supply Cap
sUSDX 86% 91% 5% 1,250,000
  • Collateral Factor, Liquidation Factor & Penalty: sUSDx and sUSDf have very similar token behaviour so using similar recs provided for sUSDf on Mainnet to sUSDX on Arbitrum.
    • Note: USDf depegged briefly several weeks ago but regained its peg. USDX has similar token risks as USDf.
  • Supply Cap: 1.25M sUSDX on each Comet, to keep maximum liquidation size within acceptable slippage tolerances.

Rationale

  • Token Overview:
    • USDX: A crypto-native synthetic dollar stablecoin from Stables Labs, minted when users deposit approved crypto collateral (stablecoins) into delta-neutral vaults that hedge market exposure via offsetting derivative positions, maintaining a $1 peg without fiat reserves.
    • sUSDX: The yield-bearing version of USDX. Users deposit USDX into an ERC-4626 vault and receive sUSDX shares representing their claim on the vault’s USDX holdings and accrued hedging revenues.

Redemption Process

Token Action Receives Cooldown
USDX Burn “Redeem” Underlying collateral (USDC/USDT) None
sUSDX Unstake → Claim USDX → underlying collateral (USDC/USDT) 1 day
  1. USDX:
    • Connect wallet at app.usdx.money.
    • Enter the amount of USDX to burn → Receive USDC/USDT immediately on-chain (no cooldown).
  2. sUSDX:
    • In the same app, go to “Unstake” → Enter sUSDX amount → Confirm → Wait 24 hours → Go to “Claim” → Claim USDX → Burn USDX as above for immediate collateral.

DEX Liquidity

Asset Pool Type Pool Name Pool TVL (USD) 24 h Volume (USD) URL
sUSDX Camelot V3 sUSDX / USDX 0.004% 8,430,000 22,466 GeckoTerminal
sUSDX Balancer sUSDX / sUSDX/USDX / USDX 0.04% 1,390.000 0 GeckoTerminal

Total DEX liquidity for USDX is approximately $9.8 M.

Insurance Fund Overview

  • Mechanism:

    The Usdx.money insurance fund is an on-chain reserve designated to cover any negative funding or basis-spread shortfalls in the delta-hedging strategy. If funding rates turn deeply negative for a sustained period, the insurance fund “steps in” so that neither USDX holders nor sUSDX stakers lose principal mentioned here.

  • Public Visibility:

    There is no dedicated “Insurance Fund” widget in the dashboard; its capacity is implicitly represented by the surplus collateral held by the protocol.

  • Available Buffer (Implicit Fund Size):

    As of July 20, 2025, the USDX Dashboard reports:

    • Total Collateral: $679.24M
    • USDX Supply: $675.36M
    • Implicit Insurance Buffer: $679.24M − $675.36M ≈ $3.88M

  • sUSDX Staking Protection:

    The same buffer also backs the sUSDX vault. If the protocol yields available for sUSDX users are zero or negative, the fund absorbs the loss so that the USDX value of sUSDX never falls below 1:1.

Oracles

We recommend pegging USDX to 1, and since sUSDX is an ERC 4626 vault, we recommend using ConvertToAssets function on the contract.

Next Steps

We welcome community feedback.

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sUSDX (Arbitrum) Asset Assessment