> For the complete documentation index, see [llms.txt](https://docs.axis.to/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.axis.to/start-here/what-is-axis.md).

# What is Axis?

{% hint style="info" %}
**V2 · Ethereum · live.** This page describes the audited (OpenZeppelin) V2 contracts, deployed on Ethereum mainnet; USDx and its rewards vault are live on Ethereum, and contract addresses are on the [Contract Addresses](/reference/contract-addresses.md) page. The V1 private beta on Plasma is covered under Legacy.
{% endhint %}

Axis builds the infrastructure behind digital asset markets: liquidity, settlement, and credit for the institutions moving capital through them.

Axis provisions liquidity, makes markets, and manages risk across venues, currencies, and settlement systems. Institutions hold credit lines and settlement relationships with Axis, so a trade does not have to wait for every position to be pre-funded.

USDx is the first product built on that infrastructure, and the only one live today. USDx is a dollar with real utility: an asset that finances positions and settles trades between Axis counterparties. sUSDx is a separate product, and it is where deposits that would otherwise sit idle earn a return.

## Why Axis

Axis is built around a simple thesis: markets are fragmented, and capital that can move to where liquidity is scarce, and price the risk of doing so, can earn a return. Four ideas define the business.

1. **Global liquidity provision and market making.** Axis exists to make markets more efficient, supplying depth and two-sided prices wherever there is demand for liquidity, across venues, currencies, and settlement systems.
2. **Resilience across market cycles, and the ability to capture volatility.** A market-neutral book is built to hold up whether markets are rising, falling, or sideways. Just as important, Axis is positioned to *capture* volatility rather than be hurt by it: dislocation, stress, and repricing are when fragmentation is widest and opportunities are richest. That long-volatility, long-optionality posture is a distinctive source of capital efficiency for the wider industry.
3. **Trading-execution and risk-management infrastructure.** Underneath the products sits the machinery of a professional trading desk, execution across many venues, hedging, and continuous risk management that keeps the book within defined limits and prices counterparty, venue, and custody exposure.
4. **Capital efficiency.** Every unit of USDx is backed by assets held by the protocol, and the design keeps that backing deployed rather than idle, so the book can scale without hard collateral constraints. Realized returns can be directed into rewards, including incentive programs featuring sUSDx. Rewards are a consequence of the business, not its starting point, and the reward rate is variable.

## What Axis does

Axis runs a market-neutral trading operation and packages access to it as onchain products. Day to day, that means:

* **Trading.** Capturing price dislocations of the same or related exposure while hedging out market direction.
* **Liquidity provisioning.** Supplying depth to venues and pairs that are underserved.
* **Market making.** Quoting two-sided prices and earning the spread.
* **Managing risk.** Keeping the book delta-neutral and within defined limits, and pricing counterparty, venue, and custody exposure.

Market-neutral arbitrage, capturing price differences while hedging out market direction, is an established institutional trading strategy, not a crypto invention. Axis's structural edge is cross-venue and cross-asset fragmentation: a durable, market-neutral return source that does not rely on any single mechanism.

## Where the return comes from

Axis earns its return from structural fragmentation across venues, currencies, and settlement systems. That edge is expressed through four complementary trading categories:

* cross-venue arbitrage
* cross-currency arbitrage
* funding rate arbitrage
* OTC/RFQ

Funding is one component (and can be the larger share in a given period); see the Transparency Dashboard for current attribution. The active mix can change as opportunities and risk conditions change.

## USDx as the first product

USDx connects a synthetic dollar to that trading engine. USDx, the **Axis Dollar**, is a **dollar-denominated, over-collateralized synthetic dollar**, **not** a stablecoin. It is backed by **digital and tokenized assets first**, plus traditional assets, plus the **corresponding futures and hedge positions** that keep the backing market-neutral. That backing is **actively-managed trading inventory**, so holding USDx carries real risk.

The protocol separates three functions that are easy to confuse:

1. **Mint and redemption.** Supported assets enter through a signed mint order, and USDx is **minted**. A signed redemption order burns USDx and returns the assets specified in that order.
2. **Trading.** Axis runs the market-neutral trading described above. It takes place outside the rewards vault, and it introduces market, custody, counterparty, and operational dependencies.
3. **Reward distribution.** Realized returns can be funded into the rewards vault. As rewards vest, the amount of USDx represented by each sUSDx position increases.

## The two tokens

| Token     | What it is                                                                                                      | Does it earn staking rewards?                            |
| --------- | --------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------- |
| **USDx**  | The Axis Dollar, a dollar-denominated, over-collateralized synthetic dollar                                     | No, not by simply holding it                             |
| **sUSDx** | The Axis Rewards Vault, a yield-bearing, tokenized vault position, permissionlessly created when you stake USDx | It accrues distributed rewards through its exchange rate |

Holding sUSDx does not create a fixed interest payment. Returns depend on rewards actually delivered to the vault, and those rewards depend on trading results and operations.

## What Axis is not

* USDx is **not a stablecoin**, it is a synthetic dollar backed by actively-managed trading inventory.
* USDx is not a bank deposit.
* sUSDx does not promise a fixed APY.
* The sUSDx exchange rate is not the USDx market price.
* A mint-and-redeem mechanism does not guarantee that USDx will always trade at exactly $1.
* Market-neutral arbitrage is not risk-free.

## Why the system has two tokens

Separating USDx from sUSDx lets users choose between holding the Axis Dollar and accepting the additional staking-vault mechanics needed to receive distributed trading returns. It also makes the accounting explicit: rewards accrue to vault positions rather than changing every USDx balance.

## Where to go next

* [Origin](/start-here/origin.md) covers where Axis came from and why it is built this way.
* [How Axis Works](/start-here/how-axis-works.md) follows the complete lifecycle.
* [How USDx Targets $1](/usdx-the-synthetic-dollar/peg-stability.md) explains the price-stability pathway and its limits.
* [How Axis Earns Yield](/susdx-the-rewards-vault/how-axis-earns-yield.md) separates trading returns from vault accounting.
* [Risk Overview](/risk/risk-overview.md) explains the principal risks.


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