f(x) Protocol — fxUSD

Contract Addresses

Core Token Contracts

Contract	Address	Type
fxUSD	0x085780639CC2cACd35E474e71f4d000e2405d8f6	TransparentUpgradeableProxy (impl: FxUSDRegeneracy 0xf729422d68c2cf00574fb5712972454cf402a9b1)
FXN (governance token)	0x365AccFCa291e7D3914637ABf1F7635dB165Bb09	ERC-20
veFXN	0xEC6B8A3F3605B083F7044C0F31f2cac0caf1d469	Vote-escrowed FXN

V2 Collateral (PoolManager — Primary Custodian)

In V2, all position collateral is accounted for by the PoolManager contract — individual pool contracts (xstETH, xWBTC) are accounting/NFT contracts only and hold zero tokens. The manager normally custodies the tokens directly, except collateral borrowed by registered sPOSITION pools or deliberately deployed through a configured strategy.

Contract	Address	Role
PoolManager (Long)	0x250893CA4Ba5d05626C785e8da758026928FCD24	Custodies all V2 collateral, manages xPOSITION/fxMINT
ShortPoolManager	0xaCDc0AB51178d0Ae8F70c1EAd7d3cF5421FDd66D	Manages sPOSITION positions (borrows collateral from PoolManager)

Collateral held in PoolManager (August 15, 2026):

Asset	Amount	USD Value	Pool debt	Pool CR
wstETH (xstETH pool 0x6ecfa38fee8a5277b91efda204c235814f0122e8)	~4,635.20 wstETH	~$8.71M	~6,383,507 fxUSD	~136.7%
WBTC (xWBTC pool 0xab709e26fa6b0a30c119d8c55b887ded24952473)	~1,243.47 WBTC	~$78.33M	~57,925,995 fxUSD	~135.5%
Total		~$87.04M	~64,309,502 fxUSD

Overall V2 collateralization ratio: ~135.6% (~$87.04M collateral / ~$64.18M debt at NAV $0.9980). The live pool-oracle anchor prices were $1,878.45 per wstETH and $62,992.68 per WBTC at the snapshot block. The WBTC pool carries ~90% of system debt and ~90% of collateral value; both active pools are only about 4–5% of collateral-price downside from the 130% Stability Mode trigger if positions do not deleverage.

Supply reconciliation: total supply 64,309,766.03 fxUSD less V2 pool debt 64,309,501.97 leaves 264.06 fxUSD of legacy V1 issuance — the two figures reconcile exactly, confirming that issuance is accounted for by the V2 pools and residual V1 markets.

Short leg: sPOSITIONs post fxUSD as collateral in the ShortPoolManager and borrow collateral out of the PoolManager. Two short pools are registered — f(x) stETH Short 0x25707b9e6690b52c60ae6744d711cf9c1dfc1876 (56,885 fxUSD collateral, 14.72 wstETH borrowed) and f(x) WBTC Short 0xa0cc8162c523998856d59065faa254f87d20a5b0 (215,796 fxUSD collateral, 1.91 WBTC borrowed). Borrowed collateral is capped at 50% of each long pool's balance (shortBorrowCapacityRatio = 5e17) and accounts for most of the gap between the PoolManager's token balance and its internal collateralBalance.

Note: fxUSD.isUnderCollateral() returns true — this flag reflects legacy V1 market status (wstETH treasury at 79.3% CR with only ~$8.1K remaining). The active V2 system via PoolManager maintains ~135.6% collateralization.

Legacy V1 Treasury Contracts (Minimal Remaining Value)

Treasury	Address	Base Token	Remaining Value
stETH Treasury	0xED803540037B0ae069c93420F89Cd653B6e3Df1f	wstETH	~$8.1K (4.30 wstETH, 79.3% CR, ~264 legacy fxUSD)
sfrxETH Treasury	0xcfEEfF214b256063110d3236ea12Db49d2dF2359	sfrxETH	~$129K (69.02 sfrxETH, ~10,829% CR)

Reserve Pool

Contract	Address	Holdings
Reserve Pool	0xE93F5DD55eC9bdAbbba5eA88E4b4f3C253ee45Ed	17.77 wstETH + 0.43 WBTC + 1,302 fxUSD — ~$61.5K total, ~0.1% of debt

Market & Infrastructure Contracts

Contract	Address	Purpose
PegKeeper	0x50562fe7e870420F5AAe480B7F94EB4ace2fcd70	Maintains fxUSD peg via Stability Pool
Configuration	0x16b334f2644cc00b85DB1A1efF0C2C395e00C28d	Protocol parameter configuration
ProxyAdmin	0x9b54b7703551d9d0ced177a78367560a8b2edda4	Controls all proxy upgrades; owned by TimelockController (since April 20, 2026)
TimelockController	0x68863fb8855b04509a835082478D6E3D0bE4E61a	3-day (259,200s) minimum delay on ProxyAdmin actions; PROPOSER/EXECUTOR/CANCELLER = 6/9 multisig
GatewayRouter	0xA5e2Ec4682a32605b9098Ddd7204fe84Ab932fE4	User-facing router
GaugeController	0xe60eB8098B34eD775ac44B1ddE864e098C6d7f37	FXN emissions gauge voting
StETHPriceOracle	0x0C5C61025f047cB7e3e85852dC8eAFd7b9a4Abfb	Live oracle for the xstETH pool; 1% max price deviation. owner() = 6/9 multisig (not the timelock)
WBTCPriceOracle	0xb3c90e64EB6f456A5F5C17Aa99b6aecA6f4a6390	Live oracle for the xWBTC pool; 2% max price and WBTC/BTC deviation. owner() = 6/9 multisig (not the timelock)
AaveV3Strategy (wstETH)	0xFd3A6540e21D0E285f88FBFd904883B23e08F5C8	Configured PoolManager wstETH strategy, 100,000 wstETH capacity; currently holds 0
AaveV3CompoundStrategy (USDC)	0xd023Aac0e2D46c93d4c6e8e2A449bF2d4687804f	Configured Stability Pool USDC strategy, 100M USDC capacity; currently holds ~19 USDC

Stability Pool & fxSAVE

Contract	Address	Purpose
fxSP (Stability Pool)	0x65C9A641afCEB9C0E6034e558A319488FA0FA3be	Holds fxUSD + USDC for peg maintenance; 57,460,692 fxUSD + 6,836,417 USDC (~$64.2M)
fxSAVE	0x7743e50F534a7f9F1791DdE7dCD89F7783Eefc39	Auto-compounding fxSP vault; 61.67M fxSP (~$62.3M), 96.9% of fxSP

Ethereum ↔ Base Bridge

fxUSD uses the standard LayerZero V2 lock-and-mint representation model documented in the official SDK and route configuration. Canonical Ethereum fxUSD is locked in the adapter; the Base OFT burns and mints only the remote representation. The adapter has no authority to mint canonical Ethereum fxUSD.

Contract	Chain	Address	Role
FxUSDOFTAdaptor	Ethereum	0xA07d8cc424421cC2bce0544a65481376f010A438	Escrows canonical fxUSD; held 308,980.654349 fxUSD (0.48% of supply) at the snapshot block
fxUSD OFT	Base	0x55380fe7A1910dFf29A47B622057ab4139DA42C5	Bridged Base representation; total supply exactly matched Ethereum escrow
LayerZero EndpointV2	Ethereum / Base	0x1a44076050125825900e736c501f859c50fE728c	Authenticates and delivers OFT messages
Base bridge-owner Safe	Base	0x44E4158d93ACCf19F7B97a28B88A26DfF3c3D6d2	3-of-4 Safe owning the Base OFT; Ethereum adapter is owned by the operational 6-of-9 Safe

Governance

Contract	Address	Configuration
Operational Multisig	0x26B2ec4E02ebe2F54583af25b647b1D619e67BbF	6-of-9 Gnosis Safe (v1.3.0), 678 nonce
Emergency Multisig	0x28c921adAC4c1072658eB01a28DA06b5F651eF62	3-of-4 Gnosis Safe (emergency pause), 427 nonce

DEX Liquidity Pools

Pool	Address	Composition
Curve USDC/fxUSD	0x5018BE882DccE5E3F2f3B0913AE2096B9b3fB61f	~$7.52M (4.47M USDC + 3.05M fxUSD, 59.4/40.6) — also the EMA source that gates minting and redemption
Curve msUSD/fxUSD	0x138Bb0f3208bd729a561F3786DDb97BBc69e6628	~$0.59M; msUSD was priced near $0.70 by the Curve API at the snapshot
Curve reUSD/fxUSD	0xb0ef04ACE97d350E24Efa5139d2590D26a61A8Dc	~$0.55M
Curve USDnr/fxUSD	0x3204d754a3003cEc155e2D8F44b3b48eD60b7Cc6	~$0.44M
Curve fxUSD/frxUSD	0x851907CAC684797eee43669798D78004e269Cb5E	~$0.15M
Curve alUSD/fxUSD	0x27cB9629aE3Ee05cb266B99cA4124EC999303c9D	~$0.14M
Curve GHO/fxUSD	0x74345504Eaea3D9408fC69Ae7EB2d14095643c5b	~$0.06M
Curve DeFi Stable Avengers	0x8B878AFE454e31CF0A79c6D7cf2f077DD286C12f	~$0.03M total across fxUSD, USDC, USDaf and BOLD

Audits and Due Diligence Disclosures

f(x) Protocol has an extensive audit history with 21 audit reports from 3 reputable security firms:

Audit Scope	Date	Auditor	Link
f(x) Protocol V1	June 14, 2023	Secbit	Report
Stability Pool	July 25, 2023	Secbit	Report
f(x) Protocol V1 Update	September 17, 2023	Secbit	Report
V1 Gauge Mechanism	November 29, 2023	Secbit	Report
Stability Pool Boost	December 13, 2023	Secbit	Report
veFXN Boost Delegation	January 18, 2024	Secbit	Report
V1 fxUSD	February 23, 2024	Secbit	Report
f(x) Protocol Overall	April 16, 2024	Trail of Bits	Report
btcUSD	April 19, 2024	Secbit	Report
New Oracle Design	May 14, 2024	Secbit	Report
arUSD	June 18, 2024	Secbit	Report
New Oracle Design	July 10, 2024	Trail of Bits	Report
aFXN	July 26, 2024	Secbit	Report
f(x) Protocol V2	January 1, 2025	Secbit	Report
V2 WBTC Oracle & Batch Ops	March 17, 2025	Secbit	Report
fxSAVE	March 17, 2025	Secbit	Report
V2.1 (sPOSITIONs)	July 22, 2025	Secbit	Report
f(x) Protocol V2.0	August 4, 2025	OpenZeppelin	Report
Limit Orders & fxMINT	October 30, 2025	Secbit	Report
Omnichain fxUSD (EIP-3009)	January 26, 2026	Secbit	Report
f(x) 2.0 for Katana Chain	March 9, 2026	Secbit	Report

The protocol has a complex smart contract architecture spanning multiple treasuries, markets, position managers, stability pools, oracle systems, and governance contracts. All core contracts are upgradeable proxies controlled by the ProxyAdmin. Every version of the protocol in production has been audited, with continuous audit coverage from Secbit since V1.

Bug Bounty

AladdinDAO operates a self-hosted security bounty program covering all contracts in its f(x) repositories, with a maximum $500,000 payout for critical vulnerabilities. It is not an Immunefi-managed program and disclosures are submitted directly to the team. The payout exceeds the framework's $200K score-2 threshold but remains below the >$1M score-1 threshold.

Notable vulnerability: In April 2025, ChainSecurity responsibly disclosed a double flash loan vulnerability that could have resulted in >$2M in losses. The f(x) team promptly fixed it by removing the Balancer V2 flash loan integration. ChainSecurity describes this as internal research followed by responsible disclosure; no evidence was found that it was submitted through or paid by the bounty program.

Historical Track Record

• In production since: February 23, 2024 (~30 months as of August 2026)
• Current TVL: ~$95.9M (DeFi Llama); ~$87.04M active V2 collateral backing ~64.31M fxUSD pool debt in PoolManager
• TVL history: Spent 182 days above $100M between May–November 2025; all-time peak $271M on August 24, 2025. Over the last 90 days TVL ranged from $71.6M on July 1, 2026 to $96.9M on July 22, 2026, and stood at $95.9M on August 15.
• fxUSD supply: ~64.31M, up from ~18.1M in March 2026 — the growth has come almost entirely from the WBTC leg, which now carries ~90% of system debt
• Peg stability: fxUSD has generally maintained its peg. CoinGecko publishes a $0.9531 ATL for December 5, 2024, but this could not be corroborated: DeFiLlama's daily series records $0.99768 that day and the checked crvUSD/fxUSD Curve pool's recorded swaps were approximately $0.9948–$0.9970. The unverified aggregator ATL is not treated as an onchain depeg or stress event. Current NAV is ~$0.9980 and Curve EMA ~$1.00034.
• Security incidents: One responsibly disclosed vulnerability (ChainSecurity, April 2025) — no exploits or fund losses
• Governance events: ProxyAdmin ownership moved to a 3-day TimelockController on April 20, 2026 (block 24,920,358, tx 0xeb7c71fc…8b9fd8). The last proxy upgrade of any core contract was on April 20, 2026, immediately before that transfer; no proxy has been upgraded since the timelock took control.
• Holder concentration: The Stability Pool holds 57,460,692 fxUSD — 89.35% of total supply — and fxSAVE's assets equal 96.9% of all fxSP shares. The Curve USDC/fxUSD pool holds a further 4.7% of supply. Holder distribution remains independently visible through Blockscout.

The protocol has operated for over 2 years with no exploits or fund losses. The published December 2024 $0.953 ATL is not supported by the checked DeFiLlama and onchain Curve history and is therefore excluded from risk scoring. TVL scaled from launch to a sustained $100M+ band in mid-2025 and was about $95.9M at the August 15 snapshot.

Funds Management

In V2, all fxUSD position collateral is accounted for by the PoolManager contract (0x250893CA4Ba5d05626C785e8da758026928FCD24), which records ~4,635.20 wstETH (~$8.71M) and ~1,243.47 WBTC (~$78.33M) — totaling ~$87.04M backing ~64.31M fxUSD pool debt (~135.6% CR at NAV). Some collateral is temporarily borrowed by sPOSITIONs, explaining the difference between the manager's accounting balance and direct ERC-20 balance. No collateral is deployed to external protocols today, but that is a discretionary state rather than an architectural guarantee: the PoolManager has a live allocations entry pointing wstETH at an AaveV3Strategy (0xFd3A6540e21D0E285f88FBFd904883B23e08F5C8) with a 100,000 wstETH capacity — roughly 22x the current wstETH balance — and any ASSET_MANAGER_ROLE holder can push collateral into it without a timelock (see Centralization & Control Risks). The strategy currently holds 0 wstETH. The Stability Pool has an equivalent USDC path into an AaveV3CompoundStrategy (0xd023Aac0e2D46c93d4c6e8e2A449bF2d4687804f, 100M USDC capacity) which holds ~19 USDC — actual Aave exposure across the protocol is negligible.

Accessibility

• Who can mint: Anyone can mint fxUSD by depositing collateral (wstETH, WBTC in V2) through fxMINT or by opening xPOSITION/sPOSITION positions. No whitelist required.
• Minting mechanism: Atomic in a single transaction via flash loans. Users deposit collateral, fxUSD is minted proportional to their leverage/debt position.
• Redemption is conditional, not always-on. PegKeeper.isRedeemAllowed() returns true only while the Curve USDC/fxUSD EMA is below the priceThreshold of $0.998 (PegKeeper implementation). The EMA is currently ~$1.00034, so redemption is disabled and isBorrowAllowed() is true. The mechanism is a depeg backstop that establishes a floor near $0.995 (redeeming $1 of collateral less a 0.5% fee, getRedeemFeeRatio() = 5e6/1e9); it is not an exit route available at par.
• Fees: Opening fee: 0.5% of minted debt (fxMINT), 0.3% (xPOSITION/sPOSITION). Closing fee: 0.2% (fxMINT), 0.1% (xPOSITION/sPOSITION). 0% ongoing annual interest for fxMINT. Onchain: redeem fee 0.5%, flash-loan fee 0.01%, liquidation expense ratio 10%, harvester ratio 0.1%.
• Rate limits: Each redemption call walks from the highest- to lower-leverage ticks and can consume at most 20% of aggregate debt in each tick (getMaxRedeemRatioPerTick() = 2e8/1e9). A single call may redeem from multiple ticks, but it does not restart at the top; any requested remainder needs another call. This is a per-tick limit, not a 20% cap per individual xPOSITION (BasePool._redeem).

Collateralization

• Fully collateralized onchain by crypto-native assets accounted for in the PoolManager: wstETH (~$8.71M) and WBTC (~$78.33M)
• Over-collateralization: The V2 system maintains ~135.6% CR (~$87.04M collateral backing ~$64.18M debt at NAV), equivalent to ~74% aggregate LTV against a per-position rebalance trigger at 88% LTV. The system requires >100% CR; Stability Mode triggers protective measures at CR <130%. Both active pools are close to that system threshold: xstETH is ~136.7% CR and xWBTC ~135.5%, equivalent to only about 4–5% additional collateral-price downside with no deleveraging. Note: fxUSD.isUnderCollateral() currently returns true due to the legacy V1 wstETH market (79.3% CR with only ~$8.1K remaining), not the active V2 system.
• Collateral quality: wstETH (Lido) and WBTC — blue-chip DeFi assets with deep liquidity. V2 concentrates collateral in two high-quality assets rather than the V1 approach of 6+ collateral types, but the mix is heavily skewed: WBTC is ~90% of collateral value and backs ~90% of debt, so system solvency tracks BTC far more than ETH.
• Liquidations are on-chain via two mechanisms:
  • Rebalancing (Liquidation Brake): Triggered at 88% LTV — partial position reduction, 2.5% bounty
  • Hard Liquidation: Triggered at 95% LTV — full position closure, 4% bounty
• Band system: Positions are grouped into 0.15% price bands for efficient batch rebalancing by keepers
• Peg stability mechanisms (5 layers):
  1. Organic market pressure from position open/close
  2. Stability Pool peg keeper (buys fxUSD below peg using USDC)
  3. Funding Level I: triggered when Stability Pool USDC <5%, cost = Aave USDC borrow rate
  4. Enhanced protection: Curve EMA < $0.998 triggers mint pause + Funding Level II (10x Aave rate)
  5. Redemption: hard floor at $0.995 via 1:1 collateral redemption with 0.5% fee
• Stable buffer has recovered above its trigger. The Stability Pool holds 57,460,692 fxUSD and 6,836,417 USDC, making USDC about 10.65% of pool value — above the 5% Funding Level I threshold. isFundingEnabled() is currently false, while the PegKeeper has meaningful USDC ammunition to buy fxUSD below peg. This is a favorable change from the 0.16% buffer observed on July 27, but depositors can withdraw and the ratio remains dynamic.
• Risk curation: Governance-adjustable parameters include LTV thresholds, fees, oracle deviations, and collateral caps

Provability

• Reserves fully verifiable on-chain — PoolManager accounting, direct token custody, registered short-pool borrowing and any configured-strategy balances are readable by anyone
• Exchange rate / NAV: Computed on-chain algorithmically via the f(x) invariant formula. No off-chain inputs for NAV calculation.
• Oracle system: Multi-source design:
  • stETH/USD: Chainlink ETH/USD + Uniswap V3 USDC/ETH (0.05% and 0.3% pools) + Curve stETH/ETH EMA + Uniswap V3 stETH/ETH. 1% deviation threshold.
  • WBTC/USD: Chainlink BTC/USD + Chainlink WBTC/BTC + Uniswap V3 pools (WBTC/USDC, WBTC/ETH, USDC/ETH). 2% deviation threshold.
• Admin minting: The fxUSD contract is upgradeable (TransparentUpgradeableProxy, implementation FxUSDRegeneracy 0xf729422D68c2cf00574fb5712972454cf402A9b1, last upgraded February 17, 2026). ProxyAdmin is owned by the TimelockController, so any upgrade that introduced unbacked minting would be visible for 3 days before it could execute. Under the current implementation, fxUSD can only be minted against collateral through the PoolManager and ShortPoolManager.
• isUnderCollateral flag: The fxUSD contract currently reports isUnderCollateral() = true due to a legacy V1 wstETH market with 79.3% CR (~$8.1K remaining, negligible). The active V2 system holds ~$87.04M collateral against ~64.31M fxUSD pool debt (~135.6% CR at NAV).
• No third-party verification (no Chainlink PoR or custodian attestation needed — all on-chain)

Liquidity Risk

• Primary liquidity: Curve USDC/fxUSD pool at ~$7.52M with ~59.4% USDC and ~40.6% fxUSD. This single pool is doing double duty — it is both the main exit venue and the EMA price source that the PegKeeper uses to gate minting, redemption and funding costs.
• Secondary pools: Six smaller Curve pools total only ~$1.94M at current component prices (msUSD ~$0.59M, reUSD ~$0.55M, USDnr ~$0.44M, frxUSD ~$0.15M, alUSD ~$0.14M, GHO ~$0.06M), plus ~$0.03M in the four-asset DeFi Stable Avengers pool (Curve API snapshot). These venues introduce other stablecoin risk and generally require a second hop to reach USDC; msUSD was itself priced near $0.70 in that snapshot.
• Redemption mechanism: Direct redemption for underlying collateral (wstETH/WBTC) with a 0.5% fee — but only enabled while the Curve EMA is below $0.998. Each call walks the leverage ticks once and can redeem up to 20% of aggregate debt per tick; it is not capped at 20% of one position or 20% total. Redemption is currently disabled and cannot be relied on as an exit at par.
• Stability Pool exits: 1% instant-redeem fee (instantRedeemFeeRatio = 1e16), or fee-free after a 60-minute cooldown (redeemCoolDownPeriod = 3600s). Redemptions pay out pro-rata in the pool's assets, currently about 89.35% fxUSD and 10.65% USDC by value. This buffer improves exit quality, but most of a large fxSAVE/fxSP redemption would still return fxUSD that must be sold or held.
• Slippage analysis: Snapshot-block get_dy quotes were materially better than the prior report assumed: 500K fxUSD returned ~500,056 USDC, 1M returned ~999,997 USDC, and 4M returned ~3,989,756 USDC (about 0.26% below par). The pool can therefore absorb ordinary and moderately large exits efficiently in its current state. Impact becomes nonlinear as an exit approaches the pool's ~4.47M USDC side, and direct collateral redemption remains unavailable while fxUSD trades at par.
• Historical market data caveat: The published $0.953 December 2024 ATL could not be corroborated in checked DeFiLlama or primary Curve trade history and is not used as evidence of stressed liquidity.
• Structural concentration: 89.35% of fxUSD supply sits in the Stability Pool, and fxSAVE's assets equal 96.9% of all fxSP shares. Demand for fxUSD is therefore overwhelmingly protocol-internal yield-seeking rather than external usage, and a coordinated fxSAVE exit would still put most proceeds through the ~$7.52M Curve pool. Primary DEX depth is only ~11.7% of supply; all checked Curve liquidity totals about 14.7% of supply.

Centralization & Control Risks

Governance

• All core contracts are upgradeable via TransparentUpgradeableProxy, controlled by ProxyAdmin 0x9b54b7703551d9d0ced177a78367560a8b2edda4
• 3-day timelock on upgrades and core parameters (since April 20, 2026): ProxyAdmin is owned by a TimelockController at 0x68863fb8855b04509a835082478D6E3D0bE4E61a with a 259,200-second (3-day) minimum delay. The timelock also holds DEFAULT_ADMIN_ROLE on fxUSD, PoolManager, ShortPoolManager, Configuration, fxSP, fxSAVE and PegKeeper — verified by hasRole(0x00, timelock) == true and hasRole(0x00, multisig) == false on each. Parameter changes, not just upgrades, therefore go through the delay.
• The timelock is honored in practice. On May 27, 2026 the multisig scheduled updatePoolCapacity(xWBTC, 2000e8, 100_000_000e18) (tx 0x6e3b2e46…36115) and executed it on May 30, 2026 (tx 0x53e62749…9bbeca) — exactly the 3-day delay, no shortcut. No MinDelayChange or Cancelled events have been emitted since the timelock was deployed.
• EXECUTOR_ROLE is granted to address(0), so execution after the delay is permissionless — anyone can push through a scheduled operation. PROPOSER and CANCELLER are held only by the 6/9 multisig; TIMELOCK_ADMIN_ROLE is held only by the timelock itself.

Material carve-out — the price oracles are not behind the timelock. The two live price oracles, StETHPriceOracle 0x0C5C61025f047cB7e3e85852dC8eAFd7b9a4Abfb and WBTCPriceOracle 0xb3c90e64EB6f456A5F5C17Aa99b6aecA6f4a6390 (confirmed as the pools' priceOracle()), are plain Ownable2Step contracts whose owner() is still the 6/9 operational multisig. Their pendingOwner() is the TimelockController, and a batch calling acceptOwnership() on both was scheduled through the timelock on April 20, 2026 (tx 0xb8a2e1ce…3b4f6d, operation 0x0ac451c6…86dd0). That operation has been ready to execute since April 23, 2026 and remains pending — isOperationReady() == true, isOperationDone() == false. Until someone executes it, the multisig can, with no delay:

• updateMaxPriceDeviation(...) — currently 1% (stETH) and 2% (WBTC). This bound is what clamps spot prices back to the manipulation-resistant anchor inside getPrice().
• updateOnchainSpotEncodings(...) — repoints the oracle at arbitrary on-chain spot sources. The only validation is that the encoding does not revert.

Used together — widen the deviation bound, then point the oracle at a controlled pool — these produce an arbitrary getExchangePrice() / getLiquidatePrice(), which is a direct, non-timelocked path to force liquidations and capture collateral. Because the remediation is already scheduled and permissionlessly executable, this is a gap in follow-through rather than an intentional design, but it is live today and is the single largest centralization risk in the system.

Non-timelocked asset-management path. ASSET_MANAGER_ROLE on both the PoolManager and the Stability Pool is held by the 6/9 multisig, the 3/4 emergency multisig and the timelock. That role's manage(asset, amount) moves funds into the already-configured strategy up to its capacity. Choosing the strategy (alloc) is DEFAULT_ADMIN_ROLE and therefore timelocked, which bounds the destination — but the configured wstETH capacity (100,000 wstETH) exceeds the entire wstETH collateral balance by ~22x, so either multisig could move the whole ETH collateral leg into Aave Prime without delay.

• Operational multisig: 6-of-9 Gnosis Safe 0x26B2ec4E02ebe2F54583af25b647b1D619e67BbF
  • Known signers: Diligent Deer, Paul, chiaki644, Gordon, Guo Yu, Jamie, Martin Krung, Sharlyn Wu, vfat
  • Mix of known and semi-anonymous contributors
  • Holds PROPOSER, EXECUTOR and CANCELLER on the TimelockController (not TIMELOCK_ADMIN_ROLE), plus EMERGENCY_ROLE and ASSET_MANAGER_ROLE directly, plus ownership of both price oracles
• Emergency multisig: 3-of-4 Gnosis Safe 0x28c921adAC4c1072658eB01a28DA06b5F651eF62
  • Signers: Gordon, Guo Yu, Jamie, Sharlyn Wu (all team members)
  • Holds EMERGENCY_ROLE on PoolManager and ShortPoolManager — can pause xPOSITION and sPOSITION operations directly, outside the timelock. Note the operational 6/9 multisig holds the same role, so pause authority is not exclusive to the emergency signer set.
• Governance voting: Snapshot space fxn.eth using veFXN voting power. 32 proposals to date with low voter participation (4–16 voters, ~118–172K veFXN per vote). The most recent proposal, FIP-30, was created February 4, 2026 — nearly six months without governance activity, so the multisig is effectively the operating authority.
• Privileged roles: The 6/9 multisig can propose to upgrade all contracts, change fee parameters and alter system addresses, all subject to the 3-day delay; and can change oracle configuration, pause positions, and deploy collateral to the configured Aave strategies with no delay at all.

Trust model: The timelock is a genuine improvement and has been respected in practice — upgrades and core parameter changes now carry a 3-day public notice, and the last proxy upgrade of any core contract predates the transfer. But the "everything is timelocked" reading does not survive verification: oracle ownership, pause authority and strategy funding all sit outside it. The realistic worst case is not a slow malicious upgrade — users could react to that — but an instant oracle repricing by a compromised or malicious 6/9 multisig. Executing the already-scheduled oracle acceptOwnership() batch would close the most severe of these paths.

Programmability

• Highly programmatic: Core operations (minting, redemption, liquidation, rebalancing, peg keeping) are all handled by smart contracts
• NAV/PPS: Calculated on-chain algorithmically via the f(x) invariant — no manual price updates
• Keepers: Rebalancing and liquidation depend on external keepers to trigger transactions. Keeper incentive is 1% (0.01% for fxSAVE harvesting); onchain getHarvesterRatio() is 0.1%. If keepers fail to act, positions may not be rebalanced in time.
• Stability Pool peg keeper: Automated but depends on sufficient USDC deposits in the pool
• Oracle updates: Chainlink feeds + Uniswap/Curve on-chain TWAP/EMA — no off-chain dependencies for price feeds

External Dependencies

• Chainlink: ETH/USD and BTC/USD price feeds — critical for all position operations and liquidations

• Uniswap V3: TWAP oracle data used as secondary/validation price source

• Curve: stETH/ETH EMA oracle, plus the USDC/fxUSD pool 0x5018BE88…FB61f whose price_oracle(0) EMA is a hard control input, not just monitoring: it decides whether minting is allowed, whether redemption is allowed, and whether funding costs are levied. A single ~$7.52M pool therefore gates the protocol's core user operations.

• Aave: allocation paths are configured for Stability Pool USDC (100M capacity) and PoolManager wstETH (100,000 wstETH capacity), but ~19 USDC and 0 wstETH are actually deployed — current Aave exposure is negligible while the capacity to create it without a timelock remains.

• Lido: wstETH is the ETH collateral leg in V2 (~$8.71M, ~10% of collateral)

• LayerZero: fxUSD has a live Ethereum↔Base LayerZero V2 route. The Ethereum FxUSDOFTAdaptor locks canonical fxUSD and peers with the Base fxUSD OFT; both point to the canonical EndpointV2 and had exactly 308,980.654349 fxUSD escrow/supply at the snapshot. This is a lock model: the adapter cannot mint canonical Ethereum fxUSD, so bridge risk is bounded to the Base representation and escrow (0.48% of Ethereum supply), although a forged Base→Ethereum release could steal that escrow. The receive-side Ethereum route requires all three required DVNs (LayerZero Labs, Nethermind, Google) plus 1-of-3 optional DVNs (Horizen, Polyhedra zkBridge, Canary), with 20 confirmations — an effective 3 required + 1-of-3 optional quorum. The operational 6-of-9 Safe owns the Ethereum adapter; a separate 3-of-4 Safe owns the Base OFT.

• Katana deployments are locally issued, not identified bridge representations. Two fxUSD / "f(x) USD" ERC-20s exist on Katana (0x4c03…FDF9, supply ~12,024; 0x1364…9f86, supply ~1,000,018). Each token exposes a local poolManager() (0x27b3…f96a and 0xFae3…3C68, respectively), and each PoolManager's fxUSD() points back to its corresponding token. The verified 0x1364…9f86 implementation restricts minting to its PoolManager; local mint events, including a 10,000-token genesis mint for 0x4c03…FDF9, corroborate local issuance. Neither token is a LayerZero OFT (endpoint() reverts), and neither is the canonical AggLayer/LxLy wrapper of mainnet fxUSD (PolygonZkEVMBridgeV2.getTokenWrappedAddress(0, fxUSD) returns the zero address on Katana). Both supplies are essentially static since the May 2026 check. This positive architecture evidence does not reveal a bridge path from Ethereum fxUSD to either Katana deployment. Because the 0x4c03…FDF9 implementation is not source-verified, a separate custom conversion path cannot be ruled out absolutely; reassess if one is identified rather than inferring a bridge from the shared name and symbol.

The protocol depends on multiple well-established DeFi protocols. Chainlink is the most critical dependency — oracle failure would impair pricing and liquidations. Aave exposure is capped and currently negligible. LayerZero is an optional, bounded bridge route rather than a dependency of Ethereum minting or collateral solvency.

Operational Risk

• Team transparency: AladdinDAO was launched by a consortium of 14 contributors and investors including Sharlyn Wu, Robert Leshner, Kain Warwick and Hart Lambur. AladdinDAO later built/incubated f(x); the launch contributors should not be described as direct f(x) core developers. The current core development team and boule members remain only partially doxxed.
• AladdinDAO launch backers: Polychain Capital, Digital Currency Group, 1kx, Multicoin Capital, CMS, Nascent, Alameda Research and DeFi Alliance participated at the AladdinDAO level. Public evidence does not establish each as a direct investor in the f(x) product.
• Documentation quality: Good — comprehensive GitBook documentation covering mechanisms, risk framework, fees, and deployments. Active GitHub with open-source contracts.
• Legal structure: AladdinDAO is structured as a DAO. No clear traditional legal entity disclosed.
• Incident response: The ChainSecurity flash loan vulnerability was handled promptly (April 2025). The protocol has a defined 5-layer risk framework with recapitalization as the final safety mechanism.

Monitoring

Key Contracts to Monitor

Contract	Address	What to Monitor
fxUSD	0x085780639CC2cACd35E474e71f4d000e2405d8f6	totalSupply changes, NAV deviations from $1.00
ProxyAdmin	0x9b54b7703551d9d0ced177a78367560a8b2edda4	Any upgrade() calls — immediate alert
TimelockController	0x68863fb8855b04509a835082478D6E3D0bE4E61a	CallScheduled, CallExecuted, Cancelled, MinDelayChange, role changes; also whether the pending oracle acceptOwnership() batch 0x0ac451c6…86dd0 gets executed
StETHPriceOracle	0x0C5C61025f047cB7e3e85852dC8eAFd7b9a4Abfb	owner() (should become the timelock), UpdateMaxPriceDeviation, updateOnchainSpotEncodings calls
WBTCPriceOracle	0xb3c90e64EB6f456A5F5C17Aa99b6aecA6f4a6390	owner() (should become the timelock), UpdateMaxPriceDeviation, updateMaxWBTCDeviation, updateOnchainSpotEncodings calls
Operational Multisig	0x26B2ec4E02ebe2F54583af25b647b1D619e67BbF	Governance parameter changes, new transactions
Emergency Multisig	0x28c921adAC4c1072658eB01a28DA06b5F651eF62	Pause events on PoolManager/ShortPoolManager
PoolManager	0x250893CA4Ba5d05626C785e8da758026928FCD24	Rebalance/Liquidation events, wstETH/WBTC balances, collateral ratio, manage() calls moving collateral into the Aave strategy
Stability Pool (fxSP)	0x65C9A641afCEB9C0E6034e558A319488FA0FA3be	USDC ratio (currently ~10.65%, above the 5% threshold), deposit/withdrawal flows, alloc/manage calls
fxSAVE	0x7743e50F534a7f9F1791DdE7dCD89F7783Eefc39	Total assets, exchange rate changes
PegKeeper	0x50562fe7e870420F5AAe480B7F94EB4ace2fcd70	Peg maintenance events, funding level triggers
Curve USDC/fxUSD	0x5018BE882DccE5E3F2f3B0913AE2096B9b3fB61f	Pool balance ratio, large swaps
FxUSDOFTAdaptor	0xA07d8cc424421cC2bce0544a65481376f010A438	Escrow balance, SetPeer, SetReceiveLibrary, SetConfig, ownership/delegate changes and unexpected releases
Base fxUSD OFT	0x55380fe7A1910dFf29A47B622057ab4139DA42C5	Supply versus Ethereum escrow, peer/config changes and 3-of-4 owner Safe changes

Critical Events & Thresholds

Event	Threshold	Action
fxUSD NAV deviation	>2% from $1.00	Immediate alert
Curve EMA price	<$0.998	Enhanced protection mode: minting disabled, redemption enabled, funding costs levied
Stability Pool USDC ratio	<5% of pool	Funding Level I activates — currently not triggered at ~10.65%
Collateral Ratio (either V2 pool)	<130%	Stability Mode — enhanced monitoring (currently ~136.7% xstETH / ~135.5% xWBTC)
Collateral Ratio (any market)	<100%	Critical — recapitalization mode
Oracle owner() change	Any	Confirm ownership moved to the timelock, not to a new EOA/multisig
UpdateMaxPriceDeviation / spot-encoding change on either oracle	Any	Immediate investigation — non-timelocked path to reprice collateral
TimelockController CallScheduled	Any	Investigate target/calldata; 3 days to react before execution
TimelockController MinDelayChange	Any	Immediate investigation — delay reduction is a major risk event
ProxyAdmin upgrade	Any call	Immediate investigation (should only occur after a timelock-scheduled call)
manage() on PoolManager or fxSP	Any	Collateral or stable reserves being deployed to Aave without a timelock
Emergency pause	Any	Immediate alert and assessment
fxUSD totalSupply	>50% change in 24h	Investigate unusual minting/burning
fxSP share of fxUSD supply	>95%	Rising protocol-internal concentration; DEX exit capacity shrinking relative to redeemable balance
LayerZero escrow / Base supply mismatch	Any	Halt bridge use and investigate stuck, forged or incorrectly accounted cross-chain messages
LayerZero DVN quorum change	Any	Re-evaluate Base→Ethereum escrow-release security before continued bridge use

Key View Functions

• fxUSD.nav() — current NAV (target: 1e18 = $1.00)
• fxUSD.totalSupply() — total fxUSD in circulation
• fxUSD.isUnderCollateral() — boolean (currently true due to legacy market; monitor for V2 changes)
• PoolManager.getPoolInfo(pool) — returns (collateralCapacity, collateralBalance, rawCollateral, debtCapacity, debtBalance) per pool
• wstETH.balanceOf(PoolManager) / WBTC.balanceOf(PoolManager) — direct collateral balance checks
• PoolManager.allocations(wstETH) / fxSP.allocations(USDC) — configured external strategy and its capacity
• StabilityPool.totalSupply() / .totalYieldToken() / .totalStableToken() — fxSP shares and the fxUSD/USDC split
• fxSAVE.totalAssets() — total assets in fxSAVE vault
• PegKeeper.isBorrowAllowed() / .isRedeemAllowed() / .isFundingEnabled() — the three EMA-gated protocol states
• PegKeeper.getFxUSDPrice() — Curve EMA price driving those three gates
• StETHPriceOracle.owner() / WBTCPriceOracle.owner() — should read as the TimelockController once the pending batch executes
• TimelockController.isOperationReady(0x0ac451c6de449a81fbe3841b847535ef693957bf41e381012c684680ae786dd0) — pending oracle ownership transfer

Recommended Monitoring Frequency

• fxUSD NAV & Curve pool balance: Every 15 minutes
• Collateral ratios: Hourly
• Multisig transactions & upgrades: Real-time (block-by-block)
• Stability Pool health: Every 4 hours
• TVL and supply metrics: Daily

Appendix: Contract Architecture

┌─────────────────────────────────────────────────────────────────┐
│                     GOVERNANCE LAYER                            │
│                                                                 │
│  ┌──────────────────┐    ┌──────────────────┐                   │
│  │ Operational       │    │ Emergency         │                  │
│  │ Multisig (6/9)   │    │ Multisig (3/4)    │                  │
│  │ 0x26B2...BbF     │    │ 0x28c9...eF62     │                  │
│  └────────┬─────────┘    └────────┬──────────┘                  │
│           │ proposes/             │ can pause                   │
│           │ executes              │                             │
│  ┌────────▼─────────┐             │                             │
│  │ TimelockController │           │                             │
│  │ 0x6886...61a (3d)  │           │                             │
│  └────────┬─────────┘             │                             │
│           │ owns                  │                             │
│  ┌────────▼─────────┐    ┌───────▼───────────┐                  │
│  │ ProxyAdmin        │    │ PoolManager       │                  │
│  │ 0x9b54...da4     │    │ ShortPoolManager   │                  │
│  └────────┬─────────┘    └───────────────────┘                  │
│           │ upgrades all proxies (subject to 3-day timelock)    │
└───────────┼─────────────────────────────────────────────────────┘
            │
┌───────────▼─────────────────────────────────────────────────────┐
│                     TOKEN / VAULT LAYER                         │
│                                                                 │
│  ┌──────────────┐   ┌──────────────┐   ┌──────────────┐        │
│  │ fxUSD         │   │ fxSAVE       │   │ FXN / veFXN  │        │
│  │ 0x0857...8f6  │   │ 0x7743...39  │   │ 0x365A...09  │        │
│  │ (stablecoin)  │   │ (yield vault)│   │ (governance) │        │
│  └──────┬───────┘   └──────┬───────┘   └──────────────┘        │
│         │ minted via        │ wraps                             │
│  ┌──────▼───────┐   ┌──────▼───────┐                            │
│  │ Markets       │   │ Stability    │                            │
│  │ (MarketV2)    │   │ Pool (fxSP)  │                            │
│  │ 0xAD9A...155  │   │ 0x65C9...3be │                            │
│  └──────┬───────┘   └──────┬───────┘                            │
└─────────┼──────────────────┼────────────────────────────────────┘
          │                  │
┌─────────▼──────────────────▼────────────────────────────────────┐
│                     PROTOCOL LAYER                              │
│                                                                 │
│  ┌──────────────┐  ┌──────────────┐  ┌──────────────┐           │
│  │ PoolManager   │  │ PegKeeper    │  │ Configuration│           │
│  │ (Long)        │  │ 0x5056...70  │  │ 0x16b3...28d │           │
│  │ 0x2508...D24  │  └──────────────┘  └──────────────┘           │
│  ├──────────────┤  ┌──────────────┐  ┌──────────────┐           │
│  │ ShortPool     │  │ GatewayRouter│  │ GaugeControl │           │
│  │ Manager       │  │ 0xA5e2...fE4│  │ 0xe60e...37  │           │
│  │ 0xaCDc...66D  │  └──────────────┘  └──────────────┘           │
│  └──────┬───────┘                                               │
│         │ custodies ALL V2 collateral                           │
│  ┌──────▼───────────────────────────────────────────────┐       │
│  │ COLLATERAL (held in PoolManager)                      │       │
│  │ wstETH: 4,635.20 (~$8.71M) via xstETH pool           │       │
│  │ WBTC:   1,243.47 (~$78.33M) via xWBTC pool           │       │
│  │ Total: ~$87.04M backing ~64.31M fxUSD (~135.6% CR)   │       │
│  └──────────────────────────────────────────────────────┘       │
└─────────────────────────────────────────────────────────────────┘
          │
┌─────────▼───────────────────────────────────────────────────────┐
│                     UNDERLYING LAYER                            │
│                                                                 │
│  ┌───────────┐  ┌───────────┐  ┌───────────┐  ┌───────────┐    │
│  │ Chainlink  │  │ Uniswap   │  │ Curve     │  │ Aave      │    │
│  │ (oracles)  │  │ V3 (TWAP) │  │ (EMA,DEX) │  │ (yield)   │    │
│  └───────────┘  └───────────┘  └───────────┘  └───────────┘    │
│  ┌───────────┐  ┌──────────────────────────────────────────┐    │
│  │ Lido      │  │ LayerZero V2: Ethereum OFTAdapter        │    │
│  │ (wstETH)  │  │ locks fxUSD ↔ Base OFT (0.48% of supply) │    │
│  └───────────┘  └──────────────────────────────────────────┘    │
└─────────────────────────────────────────────────────────────────┘

Trust boundaries:

• The 6/9 multisig has full upgrade authority over all protocol contracts and DEFAULT_ADMIN_ROLE-gated parameters, but both are subject to a 3-day timelock (as of April 20, 2026) — this is the primary trust boundary
• Outside the timelock: the 6/9 multisig owns both price oracles directly and can change deviation bounds and spot-price sources instantly; both multisigs hold EMERGENCY_ROLE (pause) and ASSET_MANAGER_ROLE (fund the configured Aave strategies) with no delay
• The 3/4 emergency multisig can pause position operations immediately but cannot upgrade contracts
• Timelock execution is permissionless (EXECUTOR_ROLE granted to address(0)); only proposing and cancelling are multisig-gated
• Keepers are permissionless (anyone can trigger rebalancing/liquidation for bounties)
• Oracle data flows from Chainlink + Uniswap/Curve and is validated with deviation thresholds — but the thresholds themselves are owner-settable outside the timelock
• The optional Base representation depends on LayerZero's route configuration and the two bridge-owner Safes. The Ethereum adapter uses a lock model and cannot mint canonical fxUSD, bounding current bridge exposure to its ~309K fxUSD escrow.

---

Reassessment Triggers

• Time-based: Reassess in 6 months (January 2027)
• TVL-based: Reassess if TVL changes by more than 50%, or sustains above $150M for >1 month
• Incident-based: Reassess after any exploit, governance change, or collateral modification
• Oracle ownership (highest priority): Reassess when the pending acceptOwnership() batch 0x0ac451c6…86dd0 executes and both price oracles come under the TimelockController — this would justify revisiting the Governance subcategory (3.0 → ~2.5). Reassess immediately if either oracle's owner() changes to anything other than the timelock, or if maxPriceDeviation / onchainSpotEncodings are modified.
• Governance: Reassess if the timelock delay is reduced, ProxyAdmin ownership or any core DEFAULT_ADMIN_ROLE moves away from the TimelockController, or if multisig threshold is lowered
• Collateralization: Reassess if system CR falls below 135%, or if the xWBTC pool CR falls below 132%
• Collateral custody: Reassess if manage() is called on the PoolManager or Stability Pool and material balances move into the Aave strategies
• Liquidity: Reassess if the primary Curve USDC/fxUSD pool falls below $5M, or if fxSP's share of fxUSD supply exceeds 95%
• Peg deviation: Reassess if fxUSD trades below $0.95 for more than 24 hours, or if PegKeeper.isRedeemAllowed() turns true (indicating the Curve EMA has broken $0.998)
• Bridge: Reassess if LayerZero peers, receive libraries or DVN quorum change; if Base supply differs from Ethereum adapter escrow; or if either bridge-owner Safe changes threshold/ownership