Felix feUSDPrice

(FEUSD)

feUSD is a fully collateralized, synthetic dollar, pegged 1:1 to the US Dollar. It is minted when users deposit crypto assets into a Collateralized Debt Position (CDP) on the Felix Protocol. Unlike centralized stablecoins, feUSD is governed by smart contracts and backed by decentralized assets, ensuring its stability and trustless nature within the Hyperliquid L1 ecosystem.

To mint feUSD, you borrow it against your own crypto assets. First, connect an EVM-compatible wallet to Hyperliquid L1 (HyperEVM). Next, deposit supported collateral such as HYPE, UBTC (wrapped Bitcoin on Hyperliquid), or various Liquid Staking Tokens (LSTs). You then set your desired borrowing interest rate; note that lower rates carry a higher "redemption risk." Once the transaction is confirmed, the feUSD is minted directly into your wallet.

The primary method to earn yield with feUSD is by depositing it into the Stability Pool. This pool is utilized by the protocol to repay debt from liquidated positions. In return, depositors receive a share of the liquidation penalties, effectively acquiring collateral at a discount. Additionally, Stability Pool participants earn a portion of the protocol's upfront fees and streaming interest paid by borrowers, creating a diversified yield mechanism.

To prevent liquidation, which occurs when your collateral's value drops too low relative to your debt, active management is key. Consistently monitor your "collateralization ratio" or "health factor," aiming to keep it significantly above the minimum threshold (typically 125%–150% is recommended for safety). You can improve your position at any time by adding more collateral to increase your ratio or by repaying a portion of your feUSD debt to reduce your liabilities.

"Redemption Risk" is a unique feature inherent to Liquity V2 forks like Felix. If feUSD trades below $1 on the open market, arbitrageurs can "redeem" feUSD for $1 worth of collateral directly from the protocol. This process prioritizes borrowers who have set the lowest interest rates. Consequently, if you maintain a very low borrowing rate, your debt is more likely to be repaid by the protocol, causing you to lose your directional exposure to your deposited collateral.

Felix Protocol prioritizes security and has undergone audits by reputable firms like Three Sigma, specifically scrutinizing its price-feed modules and core smart contracts. While these audits enhance reliability, it's crucial to acknowledge that, like all decentralized finance (DeFi) protocols, Felix is subject to inherent "smart contract risk" and "oracle risk." Users should always conduct their own due diligence and understand the associated risks.