Intro to USDX

Onchain Financial Services.

Overview of X Financial Technologies (XFT)

XFT’s mission is to bring traditional financial products and services on-chain for retail.

XFT has an asset management arm that creates and manages tokenized funds as well as a technology arm that develops decentralized finance protocols and on-chain retail banking solutions.

Introducing XFT USDX Yield (USDX)

XFT is bringing our institutional-grade yield-bearing products to retail investors. USDX is the world’s first tokenized note secured by a bankruptcy-remote portfolio of Treasuries and bank deposits. USDX will be transferable on-chain to non-US investors after an initial holding period*

Broadly accessible: Tokenized loan that can trade globally in secondary markets to self-certified non-US investors.
Yield-bearing: Accrues a variable interest rate, adjusted monthly by the issuer. Yield accrues in the form of a redemption value that increases over time.
Daily liquidity: Non-US investors can both mint and redeem USDX on a daily basis.
High-quality collateral: Secured by a portfolio of short-term US Treasuries and high quality bank deposits under control agreements.
Compliant with regulations: Issued under a continuous Reg S offering to offshore investors with best practices KYC/AML/CFT procedures.
Bankruptcy-remote: Assets are designed to be ring-fenced from a hypothetical XFT bankruptcy.

Comparing USDX with Stablecoins

Feature	Stablecoins	USDX
Bankruptcy-remoteness	Stablecoins are generally issued out of operating companies. If stablecoin issuers were to go bankrupt, including for reasons unrelated to operating their respective stablecoins, holders would likely be unable to redeem.	USDX is issued by XFT USDX LLC, a company that is bankruptcy-remote from any other entities, including XFT operating companies.
Yield	Stablecoin holders receive no interest.	USDX holders receive the yield generated from the underlying assets (less administrative expenses) in the form of increasing redemption value.
Secured by high-quality assets	Stablecoins are general unsecured liabilities of their issuers with no security interest in the assets that back them and are at risk of being subordinated to the claims of other creditors.	USDX holders have a security interest in the assets that back it, and USDX is the only debt of XFT USDX LLC.
Regulatory status	Stablecoins exist in a regulatory gray area.	USDX will be issued in compliance with US federal securities and anti-money laundering laws.
Third-party oversight	Stablecoin issuers can unilaterally change the type of assets that back them.	Ankura Trust Company protects USDX holders as Verification Agent and Collateral Agent, enforcing narrow eligibility criteria and able to force a wind-down in an event of non-compliance.
Timely redemptions	If stablecoin issuers fail to meet redemption requests within a timely manner, there would be no Event of Default nor automatic wind-down process. Rather, stablecoin holders would likely need to litigate in court to recover their assets.	If XFT USDX LLC fails to meet a redemption requests in a timely manner, an Event of Default will occur, mandating Ankura Trust to liquidate the investment portfolio and repay token holders, subject to USDX holder approval.

Sustainable Yield

USDX offers a variable interest rate adjusted monthly in advance by XFT.

The yield automatically compounds meaning the value in USD at which USDX can be minted and redeemed slowly increases each day.
USDX is launching with a 5% APY while the blended US Treasuries and bank deposit portfolio is yielding approximately 5.1% APY.

Quality Secured Collateral

USDX is senior debt that is secured by US bank demand deposits and short-term US Treasuries.
USDX will be overcollateralized by a ~3% first loss position funded by XFT Finance, creating strong alignment between USDX and XFT Finance.
This overcollateralization also provides a buffer for short-term price decreases in the US Treasuries.

Bankruptcy-Remote Protections

USDX represents debt issued by XFT USDX LLC, a special purpose vehicle, managed by a Board including an independent director, and designed to maximize bankruptcy-remoteness.
Securities are held at third-party custodians and brokers under qualified custody protection (i.e., they are NOT rehypothecated) so that your assets are protected even in the unlikely event of bankruptcy of those service providers.

Verification and Collateral Agent

Ankura Trust serves as the Verification Agent and Collateral Agent to USDX in accordance with governing documents.
As Verification Agent, Ankura will post daily reports starting 60 days after launch that will provide transparency into the assets of the issuer.
As Collateral Agent, Ankura will be prepared to seize the assets that secure USDX and repay holders if XFT was to cease operations or breach certain covenants of the debt, subject to vote from USDX holders.

Subscriptions and Redemptions Flow

Subscriptions and redemptions are processed daily to ensure liquidity.

Redemption Process

Investor sends USDX tokens to XFT address - note that only non-US investors who are on-boarded with XFT are eligible to redeem.
XFT sends USD to the investor the following business day, utilizing reserves in bank deposits.

Subscription Process

Complete KYC, AML process.
Sign USDX subscription documents.
Investor sends USD wire or stablecoins.
Investor receives temporary paper certificate evidencing USDX ownership.
40 days later, investor receives USDX token, which can be transferred to investors on the secondary transfer allow list.
Investors can add themselves to the secondary transfer allow list by certifying non-US status.

Distributions

USDC
EURC
USDT