Hex Trust’s USDX integrates with Flare Network, providing 1:1 USD backing, yield generation, and cross-chain functionality in DeFi.
The first native stablecoin launched on Flare Network by HT Digital Assets, USDX, was created in response to the increasing demand for a natively-issued, 1:1 dollar-backed asset in decentralized financing (DeFi).
Alessio Quaglini, co-founder and CEO of Hex Trust, elucidates in an interview with Cointelegraph how U.S. Dollar Index intends to be a cornerstone stablecoin for DeFi applications in the context of Markets in Crypto-Assets Regulation (MiCA)-induced compliance stress on Tether.
U.S. Dollar Index (USDX) is a stablecoin and gas token in the Flare ecosystem, and it is entirely backed by cash and cash equivalents, including short-term Treasury bills.
U.S. Dollar Index is the first native stablecoin on the blockchain for data, Flare, and is brought to life by HT Digital Assets, Hex Trust’s tokenization ecosystem, according to Quaglini.
The CEO of Hex Trust stated that U.S. Dollar Index will serve as a foundational stablecoin in DeFi, with the objective of “further integrating into DeFi applications” to establish itself as a “reliable asset” for users.
What Distinguishes USDX From Other Stablecoins?
“USDX is a 1:1 USD-referencing stablecoin intended to be fully backed by cash and cash equivalents.
Quaglini stated that the stablecoin’s value and resilience are guaranteed by the reserves, which are predominantly 1-3 month T-Bills, which are “securely held within the confines of global, tier-1 financial institutions.”
USDX will also be accessible for use on “Clearpool’s T-pool to generate rewards,” a decentralized liquidity pool (LP) within the Clearpool protocol that is explicitly designed to facilitate yield generation through stablecoin deployment.
Nevertheless, Quaglini acknowledged that the stablecoin may encounter “regulatory hurdles in different jurisdictions” and face market competition from established stablecoins, such as the regulated Circle USD, despite the potential it presents.
Flare Functionality, Yield Generation
The U.S. Dollar Index T-Pool on Clearpool provides holders with a variable or fixed interest rate, or yield, that is frequently compared to interest on savings in the TradFi space.
The CEO of Hex Trust stated that holders could receive rewards in both USDX and FLR without lock-up periods.
He also mentioned that the stablecoin’s integration with “FAssets” will allow users to utilize non-smart contract tokens such as Bitcoin in DeFi for cross-chain bridging and yield, respectively.
HT Digital Assets is launching U.S. Dollar Index on Flare to serve as a native stablecoin and gas token, and to serve as “a building block for DeFi and bridging ecosystems,” according to Quaglini.
“USDX establishes a secure foundation for innovation on the network, including perpetual futures exchanges, Flare Labs’ FAsset system, and borrowing and lending protocols,” he stated.
FAssets, USDX
The creation of USDX was motivated by the demand for a natively-issued, dollar-pegged 1:1 dollar-backed asset, according to Hugo Philion, co-founder of Flare Network and CEO of Flare Labs, in an interview with Cointelegraph.
USDX is a “foundational asset” for the DeFi ecosystem, as described by Quaglini.
It is a critical component of the Flare ecosystem and can generate yield from Clearpool “while locked in agent vaults as cUSDX,” as stated by Philion.
The Flare Labs CEO also stated that this yield opportunity “makes the FAsset system far more economically desirable from the agent perspective.”
However, FAssets cannot be released until the Flare Times Series Oracle has reliable pricing for USDX.
