{"id":"xusd","title":"xUSD","content":"**xUSD** is a yield-bearing stablecoin developed by [Overnight](https://iq.wiki/wiki/overnight) Finance that is pegged 1:1 to USD Coin ([USDC](https://iq.wiki/wiki/usdc)). The asset is designed to provide holders with passive income through a daily rebase mechanism that automatically increases the number of tokens in their wallets. It is fully collateralized and offers native cross-chain compatibility via Chainlink's Cross-Chain Interoperability Protocol (CCIP), enabling continuous yield generation across multiple supported blockchains. [\\[1\\]](#cite-id-meX83kiypFwXi2vL)​\n\n## Overview\n\nxUSD was created by [Overnight](https://iq.wiki/wiki/overnight) Finance to offer a stable, dollar-pegged digital asset that automates the process of earning passive income. Unlike many DeFi instruments that require users to stake, lock tokens, or manually claim rewards, xUSD generates yield for individuals simply by being held in a compatible web3 wallet. The protocol aims to provide a consistent APY of 8-12%, distributed through daily payouts. The core of its functionality lies in its rebase mechanism, which adjusts the token's total supply to distribute profits generated by its underlying collateral. This results in a direct increase in each holder's token balance. \n\nThe asset's collateral is managed through a diversified portfolio of low-risk, delta-neutral DeFi strategies intended to generate sustainable \"real yield\" that is not dependent on inflationary token rewards. These strategies are primarily executed on established DeFi protocols. The project's vision is articulated in its introductory materials, stating: \"As you go about your day, your xUSD balance grows automatically, reflecting real-time yields from our carefully curated DeFi strategies. There’s no need to stake, lock, or actively manage your position — your wallet balance increases daily while maintaining perfect dollar parity.\"\n\nA key architectural feature of xUSD is its design as a single, unified asset across multiple blockchains. It leverages Chainlink's CCIP to enable seamless cross-network transfers. Users can mint the token on one chain, such as [Arbitrum](https://iq.wiki/wiki/arbitrum), and move it to other supported chains without interrupting the daily yield accrual. This interoperability is designed to give users flexibility to operate within various DeFi ecosystems while maintaining the token's core function of passive income generation. [\\[2\\]](#cite-id-9PYsuKrFjv3dBJRR)​\n\n## Technology and Mechanism\n\n### Yield Generation and Rebase\n\nThe core of xUSD's yield distribution is its rebase mechanism. This system adjusts the circulating token supply to distribute profits generated by the underlying collateral. When the value of the collateral backing xUSD grows, the protocol executes a positive rebase, which algorithmically increases the number of xUSD tokens in every holder's wallet. This process runs daily and automatically, ensuring yield is delivered passively and in real time, with no user action required. [\\[1\\]](#cite-id-meX83kiypFwXi2vL)​\n\nConversely, if the collateral's value fell below 100% of the circulating tokens' value, a negative rebase could occur, reducing holders' token balances. The protocol has an insurance mechanism designed to mitigate the initial impact of such events. This passive yield model is designed to be more user-friendly than traditional yield farming, which often involves complex steps such as staking, liquidity provision, and manual reward claiming. [\\[1\\]](#cite-id-meX83kiypFwXi2vL)​\n\n### Collateralization and Strategy\n\nxUSD maintains a 100% collateralization ratio, with its backing assets stated to be immediately convertible into [USDC](https://iq.wiki/wiki/usdc) to ensure its 1:1 peg. The yield is generated by deploying this collateral into a diversified portfolio of strategies. The protocol's collateral and its performance can be monitored in real time via a dedicated page on the [Overnight](https://iq.wiki/wiki/overnight) Finance application.\n\nThe investment strategies include:\n\n* **Primary Strategy:** Delta-neutral strategies developed by [Overnight](https://iq.wiki/wiki/overnight) using the Sper protocol. These typically involve holding a spot asset, such as ETH, while simultaneously hedging the position with a corresponding short on a perpetual futures contract. This approach is designed to neutralize market volatility and earn funding rates, which are periodic payments exchanged between traders holding long and short positions.\n* **Secondary Strategies:** To further diversify, collateral is also allocated to other low-risk activities, such as depositing stablecoins into established lending protocols like [Aave](https://iq.wiki/wiki/aave) and providing liquidity to stablecoin-to-stablecoin pools on decentralized exchanges like Uniswap V3.\n\nThese strategies are managed within a conservative risk framework that includes diversification across multiple strategies and chains, along with regular portfolio rebalancing to adapt to changing market conditions. [\\[1\\]](#cite-id-meX83kiypFwXi2vL) [\\[2\\]](#cite-id-9PYsuKrFjv3dBJRR)​\n\n### Cross-Chain Interoperability\n\nxUSD is natively designed for cross-chain functionality, a feature powered by [Chainlink](https://iq.wiki/wiki/chainlink)'s Cross-Chain Interoperability Protocol (CCIP). This technical foundation allows xUSD to exist as a single, fungible asset that can be moved seamlessly across different supported blockchains. According to the development team, this capability is central to the token's design, as stated: \"Built on [Chainlink](https://iq.wiki/wiki/chainlink) CCIP technology, xUSD seamlessly flows across networks while continuously generating yield.\"\n\nUsers can mint xUSD on its initial chain, [Arbitrum](https://iq.wiki/wiki/arbitrum), where gas costs are typically lower, and then transfer the tokens to other integrated networks. The rebase mechanism remains active regardless of which chain the tokens reside on, ensuring uninterrupted yield generation. This architecture provides holders with the flexibility to use xUSD across various DeFi applications in the broader ecosystem without sacrificing its primary benefit: passive income. [\\[2\\]](#cite-id-9PYsuKrFjv3dBJRR) [\\[3\\]](#cite-id-624MXzKrWio2KLUM)​","summary":"xUSD is a yield-bearing stablecoin pegged 1:1 to USDC, automatically growing balances via a rebase mechanism. It is fully collateralized, cross-chain compatible...","images":[{"id":"QmeyuXzD8MpCEpMM4kig11zR2Cr9RoRDVHEhKpar1hsdfF","type":"image/jpeg, image/png"}],"categories":[{"id":"defi","title":"Decentralized Finance"}],"tags":[{"id":"Ethereum"},{"id":"Protocols"},{"id":"Stablecoins"}],"media":[{"id":"QmbFA3uhBBWyvwaqkYcVcy7HBhXp5Gj6aRUd2p5DYkyvHB","size":null,"name":null,"type":"GALLERY","source":"IPFS_IMG"},{"id":"QmRU4RbCL3ivRSciZwv81zGYsdUfwFCjxBUDmqazA3HUrn","size":null,"name":null,"type":"GALLERY","source":"IPFS_IMG"},{"id":"QmVZF5K9684kdqWoCRZLtbK3NA1uv8MjEKExaFz2pFhco2","size":null,"name":null,"type":"GALLERY","source":"IPFS_IMG"},{"id":"QmWTkuxG5cYxQVQ93wjGuFzSpkMCaj12xtshg5GgKuAFnc","size":null,"name":null,"type":"GALLERY","source":"IPFS_IMG"}],"metadata":[{"id":"references","value":"[\n  {\n    \"id\": \"meX83kiypFwXi2vL\",\n    \"url\": \"https://overnight.fi/\",\n    \"description\": \"Overnight Finance project overview\",\n    \"timestamp\": 1763560052548\n  },\n  {\n    \"id\": \"9PYsuKrFjv3dBJRR\",\n    \"url\": \"https://overnightdefi.medium.com/xusd-revolutionizing-cross-chain-yield-generation-20bc113d8de3?source=user\\\\_profile\\\\_page---------9-------------9c1c9b547bfc----------------------\",\n    \"description\": \"xUSD cross-chain yield generation introduction\",\n    \"timestamp\": 1763560052548\n  },\n  {\n    \"id\": \"624MXzKrWio2KLUM\",\n    \"url\": \"https://coinmarketcap.com/currencies/usd/\",\n    \"description\": \"xUSD market data and overview on CoinMarketCap\",\n    \"timestamp\": 1763560052548\n  }\n]"},{"id":"website","value":"https://overnight.fi/"},{"id":"twitter_profile","value":"https://twitter.com/overnight_fi"},{"id":"github_profile","value":"https://github.com/ovnstable"},{"id":"discord_profile","value":"https://discord.gg/overnight-fi"},{"id":"references","value":"https://docs.overnight.fi/"},{"id":"coinmarketcap_url","value":"https://coinmarketcap.com/currencies/usd/"},{"id":"discord_profile","value":"https://discord.com/invite/overnight-fi"},{"id":"telegram_profile","value":"https://t.me/overnight_fi"},{"id":"coingecko_profile","value":"https://www.coingecko.com/en/coins/overnight-fi-usd-arbitrum-one"},{"id":"arbiscan","value":"https://arbiscan.io/token/0xe80772eaf6e2e18b651f160bc9158b2a5cafca65"},{"id":"previous_cid","value":"\"https://ipfs.everipedia.org/ipfs/QmehmeQh36c4V8YBFgs6mTRgrtfvfhbewqaqAMeuYHDQWx\""},{"id":"commit-message","value":"\"Updated project data formatting and content\""},{"id":"previous_cid","value":"QmehmeQh36c4V8YBFgs6mTRgrtfvfhbewqaqAMeuYHDQWx"}],"events":[{"id":"05a2821a-9ab3-4246-8bb7-270baac351f7","date":"2021-01-01","title":"Overnight Finance Project Launch","type":"CREATED","description":"The Overnight Finance project, the developer of xUSD, became active in 2021, focusing on delta-neutral yield strategies for stablecoins.","link":null,"multiDateStart":null,"multiDateEnd":null,"continent":null,"country":null},{"id":"242026dd-711d-4379-b773-e487c6b77ece","date":"2022-07-01","title":"xUSD Market Listing","type":"DEFAULT","description":"Market data for xUSD became available, with its price chart history beginning on platforms like CoinMarketCap in July 2022.","link":"https://coinmarketcap.com/currencies/usd/","multiDateStart":null,"multiDateEnd":null,"continent":null,"country":null},{"id":"78ade03e-dcdf-491c-a77f-b61cce030a21","date":"2024-11-01","title":"xUSD Security Audit by Ackee","type":"DEFAULT","description":"A comprehensive security audit of the xUSD protocol and its smart contracts was completed by the blockchain security firm Ackee.","link":"https://overnightdefi.medium.com/xusd-revolutionizing-cross-chain-yield-generation-20bc113d8de3","multiDateStart":null,"multiDateEnd":null,"continent":null,"country":null},{"id":"6b063bb2-dc10-4de6-b689-dc49efdfc49a","date":"2025-02-01","title":"Official Public Introduction of xUSD","type":"DEFAULT","description":"Overnight Finance published an article officially introducing xUSD, detailing its features, cross-chain capabilities via Chainlink CCIP, and its vision for passive yield.","link":"https://overnightdefi.medium.com/xusd-revolutionizing-cross-chain-yield-generation-20bc113d8de3","multiDateStart":null,"multiDateEnd":null,"continent":null,"country":null}],"user":{"id":"0x8af7a19a26d8fbc48defb35aefb15ec8c407f889"},"author":{"id":"0x8AF7a19a26d8FBC48dEfB35AEfb15Ec8c407f889"},"operator":{"id":"0x88D5B28842B30b2Bc8E0839f7bcBb7798F080263"},"language":"en","version":1,"linkedWikis":{"blockchains":["arbitrum","base","optimism"],"founders":[],"speakers":[]},"recentActivity":"{\"items\":[{\"id\":\"a3036088-75c2-471b-a899-5ea0c56820b2\",\"title\":\"xUSD\",\"description\":\"xUSD is a yield-bearing stablecoin pegged 1:1 to USDC, automatically growing balances via a rebase mechanism. It is fully collateralized, cross-chain compatible using Chainlink CCIP, and backed by low-risk DeFi strategies for real-time passive income.\",\"timestamp\":\"2025-11-19T19:36:48.373Z\",\"category\":\"Wiki Update\",\"status\":{\"icon\":\"RiGlobalLine\",\"label\":\"Wiki Updated\",\"iconClassName\":\"text-green-500\"},\"user\":{\"name\":\"0x8af7a19a26d8fbc48defb35aefb15ec8c407f889\",\"address\":\"0xacb6c5AD52b8f605299B0d774CE97F26e3DB80c2\"},\"button\":{\"label\":\"View Summary\",\"icon\":\"RiFileTextLine\"},\"summarySections\":[{\"title\":\"Tags\",\"subtitle\":\"A new tag was added to the wiki.\",\"variant\":\"added\",\"changeCount\":1,\"changes\":[\"Added tag 'overnight'.\"]},{\"title\":\"Introduction\",\"subtitle\":\"The introductory paragraph was updated for conciseness.\",\"variant\":\"modified\",\"changeCount\":1,\"changes\":[\"Removed a sentence about collateralization and cross-chain compatibility.\"]},{\"title\":\"Overview\",\"subtitle\":\"The section was updated with internal links and a quote was removed.\",\"variant\":\"modified\",\"changeCount\":2,\"changes\":[\"Added internal links for 'DeFi', 'Web3', 'APY', and 'collateral'.\",\"Removed a promotional quote about automated yield generation.\"]},{\"title\":\"Technology and Mechanism\",\"subtitle\":\"Internal links were added to the 'Yield Generation and Rebase' and 'Collateralization and Strategy' subsections.\",\"variant\":\"modified\",\"changeCount\":2,\"changes\":[\"In 'Yield Generation and Rebase', added links for 'collateral' and 'yield farming'.\",\"In 'Collateralization and Strategy', added links for 'peg', 'ETH', 'stablecoin', 'decentralized exchanges', and 'Uniswap'.\"]},{\"title\":\"Cross-Chain Interoperability\",\"subtitle\":\"This section was updated with new links and a quote was removed.\",\"variant\":\"modified\",\"changeCount\":2,\"changes\":[\"Removed a quote regarding the use of Chainlink CCIP.\",\"Added internal links for 'mint' and 'DeFi'.\"]}]}]}"}