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Stablecoin protocols are nothing new to the crypto industry. However, the methods of pegging these stablecoins to the dollar have evolved over time. Most protocols offer over-collateralized debt positions as a way to issue stablecoins. The newest trend involves creating a delta-neutral position through perpetual futures, where a short futures position is taken, equal in value to the underlying collateral.
However, f(x) Protocol recognized the limitations of some of these stablecoin mechanisms and introduced a completely new type of stablecoin that derives its value from yield-bearing assets.
How does this work, and why should you care? 👇
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