Due to USDXL’s unique design within the HypurrFi Protocol, USDXL cannot be supplied to the same lending pool where it is minted.

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Benefits of This Design

USDXL’s architecture offers several key advantages compared to traditional lending assets:

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Direct Minting

Unlike other assets in HypurrFi’s lending markets, USDXL doesn’t require prior suppliers for users to borrow it. The protocol mints USDXL directly on demand when users provide sufficient collateral, creating a more efficient and streamlined process.

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Enhanced Decentralization

USDXL’s smart contracts operate independently of traditional supply and demand dynamics since there is no supply side in the traditional sense. This means:
  • Interest rates are set by HypurrFi Governance rather than utilization rates
  • No single point of control exists in the system
  • True decentralization is maintained through community governance

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Efficient Interest Model

The absence of suppliers creates a more efficient economic model:
  • No interest payments to suppliers needed
  • All interest accrued flows directly to the HypurrFi DAO treasury
  • More competitive borrowing rates for users
  • Sustainable protocol revenue generation

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Key Differences from Standard Assets

Standard AssetsUSDXL
Requires suppliersMinted on demand
Interest split between suppliers and protocolAll interest goes to protocol
Supply/demand affects ratesGovernance-controlled rates
Supply limited by depositsSupply limited by governance parameters

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Understanding USDXL Flow

  1. Traditional Assets: 
    Supplier → Lending Pool → Borrower
  2. USDXL: 
    Borrower (with collateral) → USDXL Contract → New USDXL
This streamlined approach allows for more efficient capital utilization and better rate management while maintaining the security of overcollateralization.