f(x) - fxSAVE
f(x) Protocol (by AladdinDAO) is a DeFi platform on Ethereum that splits staked ETH collateral into fxUSD (a decentralized stablecoin) and xPOSITIONs (leveraged positions up to 7x on ETH/BTC). fxSAVE is the protocol's auto-compounding savings vault — an ERC-4626 wrapper around the V2 Stability Pool that earns yield from trading fees, liquidation premiums, and staking rewards.
How f(x) Protocol and fxSAVE work:
- f(x) mints fxUSD (pegged stablecoin) backed by wstETH and WBTC
- Traders open xPOSITIONs (up to 7x leverage on ETH/BTC) and pay protocol fees on every open/close
- The V2 Stability Pool holds fxUSD and USDC, acting as peg keeper and liquidation backstop
- fxSAVE deposits into the Stability Pool and auto-compounds all yield into a single token
- The vault is delta-neutral — not exposed to volatile asset price movements
- Yield comes from xPOSITION trading fees, ETH staking rewards, and FXN emissions
f(x) Protocol is developed by AladdinDAO. The protocol has been audited by OpenZeppelin and ChainSecurity, and fxUSD has grown to ~$110M in circulating supply.
Basic Information
Fundamentals
TVL
APR
Statistics
| Weekly | Monthly | Quarterly | Yearly | |
|---|---|---|---|---|
| Period Start | N/A | N/A | N/A | N/A |
| Period End (inclusive) | N/A | N/A | N/A | N/A |
| APR | N/A | N/A | N/A | N/A |
| CAGR (APY) | N/A | N/A | N/A | N/A |
| TVL High | N/A | N/A | N/A | N/A |
| TVL Low | N/A | N/A | N/A | N/A |
Liquidity
Not calculated yet
Liquidity analysis will be available soon
Strategy
- Acquire fxUSD or USDC
- Purchase fxUSD on DEXs or mint it through the f(x) Protocol
- Alternatively, use USDC directly — fxSAVE accepts both
- fxUSD is a decentralized stablecoin backed by wstETH and WBTC
- Deposit into fxSAVE
- Navigate to the fxSAVE page and deposit fxUSD or USDC
- fxSAVE is an ERC-4626 tokenized vault — you receive fxSAVE tokens representing your share
- Your deposit enters the V2 Stability Pool which maintains fxUSD's peg
- Earn auto-compounded yield
- xPOSITION trading fees flow to the Stability Pool on every position open/close
- wstETH staking rewards from the protocol's collateral reserves add to yield
- FXN token emissions provide additional rewards
- All yield is auto-compounded — the fxSAVE token value increases over time
- Withdraw anytime
- Redeem fxSAVE tokens back to fxUSD/USDC at the increased exchange rate
- The vault is delta-neutral — no volatile asset exposure to manage
Yield Source
fxSAVE generates yield from multiple real protocol revenue sources. The vault has historically delivered around 10% APY on average, with peaks near 18% during high trading activity — all without relying on unsustainable token emissions or points incentives.
Primary yield sources:
- xPOSITION trading commissions: Every leveraged position (up to 7x on ETH/BTC) opened or closed incurs a protocol fee, which flows directly to the Stability Pool and fxSAVE holders
- ETH staking rewards: The protocol's wstETH collateral generates Lido staking yield, a portion of which is distributed to the Stability Pool
- FXN emissions: The protocol's native FXN governance token provides additional yield incentives
- Liquidation and rebalancing proceeds: When xPOSITIONs are rebalanced or liquidated, the Stability Pool captures value from these events
The yield flywheel:
- More trading activity on xPOSITIONs → more fees generated → higher fxSAVE yield
- Higher yield attracts more Stability Pool deposits → deeper liquidity for fxUSD peg → more confidence for traders
- The Stability Pool also acts as a peg keeper, buying fxUSD below peg and selling above peg
fxSAVE auto-compounds all these yield sources — wBTC and wstETH received from liquidations are automatically converted back into stablecoins and reinvested.
Strategy Limits
Deterministic Constraints
- Yield depends on xPOSITION trading volume — low trading activity reduces fee income
- FXN emissions are subject to token emission schedule and FXN price volatility
- Only available on Ethereum mainnet
- fxUSD peg target is maintained through economic incentives, not hard guarantees
Probabilistic Constraints
- In extreme market conditions, the rebalancing and liquidation mechanisms may fail, potentially creating bad debt
- Stability Pool deposits may temporarily convert to collateral (wstETH/WBTC) during liquidation events
- If total collateralization drops below 100%, new position creation halts, which could reduce fee generation
- fxUSD could depeg if collateral values crash beyond the protocol's protective mechanisms
Underlying Assets/Allocations
Risk Analysis
Potential Risks
Based on the official f(x) Protocol documentation and audit reports, the following risks are associated with fxSAVE:
- Smart Contract Risk - Despite OpenZeppelin audit, a critical flash loan vulnerability was found post-audit by ChainSecurity; complex multi-protocol integrations increase attack surface
- Bad Debt Risk - In worst-case scenarios where both rebalancing and liquidation mechanisms fail, the protocol may incur bad debt affecting Stability Pool depositors
- fxUSD Depeg Risk - If collateral values (wstETH, WBTC) crash severely or liquidations fail, fxUSD could lose its dollar peg
- Collateral Conversion Risk - During liquidation events, Stability Pool deposits may temporarily convert to wstETH/WBTC, introducing brief volatile asset exposure
- Trading Volume Risk - fxSAVE yield heavily depends on xPOSITION trading activity; bear markets or low volatility could significantly reduce fee income
- Oracle Risk - The OpenZeppelin audit flagged price manipulation vulnerabilities in low-TVL pools and stale oracle values
- Share Inflation Risk - The audit identified a potential share inflation attack vector on the fxSAVE ERC-4626 wrapper
- Dependency Risk - Protocol integrates with Aave, Morpho, Curve, and Lido, inheriting risks from all dependencies
Risk Analysis (3rd Parties)
Summary
f(x) Protocol's fxSAVE vault offers a delta-neutral, auto-compounding stablecoin yield strategy powered by real protocol revenue from xPOSITION trading fees, ETH staking rewards, and liquidation proceeds. The protocol has been audited by OpenZeppelin and benefits from a reserve fund for extreme scenarios. However, a critical flash loan vulnerability was discovered post-audit by ChainSecurity (promptly patched, no funds lost), and only a fraction of audit findings were fully resolved. The protocol's complex design — integrating Aave, Morpho, Curve, and leveraged trading — creates a large attack surface. Users should weigh the attractive yields (~10-18% APY) against the protocol's complexity and history of security findings.
See the OpenZeppelin audit report: "f(x) v2 Audit"
OpenZeppelin Audit: The f(x) v2 contracts were audited by OpenZeppelin, covering core pool mechanisms, price oracle infrastructure, and asset management. The audit identified 1 critical, 2 high, 7 medium, and 13 low severity issues.
Delta-Neutral Design: The fxSAVE vault maintains delta-neutrality through the Stability Pool mechanism, meaning depositors are not directly exposed to ETH/BTC price volatility. The pool holds fxUSD and USDC, with collateral received from liquidations auto-compounded back to stablecoins.
Reserve Fund: The protocol allocates a portion of its revenue to a reserve fund to cover extreme scenarios where both rebalancing and liquidation mechanisms fail, providing an additional safety buffer.
See ChainSecurity's disclosure: "Circumventing Access Control with a Double Flash Loan Attack"
Critical Flash Loan Vulnerability (April 2025): ChainSecurity discovered a critical vulnerability that could allow attackers to steal collateral from user positions via nested flash loans, putting over $2M at risk. The f(x) team promptly removed the Balancer V2 flash loan integration to eliminate the attack vector. No funds were lost.
Partial Audit Resolution: The OpenZeppelin audit found 23 issues total, but only 5 of 46 findings were fully resolved at audit completion (2 of 5 critical/high issues resolved). Remaining issues were acknowledged for future updates or deemed low-impact.
Complex Protocol Design: f(x) Protocol uses advanced mechanisms (leverage ticks, flashloan-based leverage, multi-protocol composability with Aave/Morpho/Curve) which increase the attack surface. The flash loan vulnerability demonstrated how complex interactions can create unexpected exploit paths.