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Overview

Overview of the ODX Protocol

How ODX Works

The protocol operates through a primary market purchase-mint-use-redeem cycle:

1. Purchase

Users buy xAssets on the primary market using USDC. ODX uses the USDC to purchase the equivalent underlying assets on leading exchanges, priced in real-time via oracles.

2. Mint & Custody

Upon purchase, ODX custodies the acquired assets in institutional-grade vaults (Ceffu and Crypto.com custody), and an equivalent amount of xAsset is minted. The xAsset is fully backed 1:1.

3. Use

xAssets can be freely used across Sonic’s DeFi ecosystem — as collateral, in liquidity pools, for trading, yield farming, or other applications.

4. Redeem

Users can burn xAssets on Sonic at any time to redeem the underlying assets (or equivalent value), minus any applicable fees. Redemption is 1:1 and trust-minimized through verifiable reserves, with ODX handling any necessary liquidation.

Key Components

Institutional providers (Ceffu + Crypto.com custody) hold the underlying assets offchain. Reserves are transparent and verifiable via onchain proof-of-reserves oracles and audits.

🏦Custody Layer

Smart contracts on Sonic handle minting upon primary market purchase and burning upon redemption. Pricing integrates with leading exchanges and oracles for market alignment.

🔄Mint & Burn Mechanism

ERC-20 compatible tokens on Sonic, pegged 1:1 to the underlying asset. They inherit the same properties (e.g., yield-bearing if the original asset is staked) and are composable in DeFi.

🪙xAssets

Proof-of-reserves are published regularly. Anyone can verify total minted xAssets against custodied reserves. Slashing or penalties apply in case of discrepancies (where applicable).

🔍Verifiability & Transparency

Participant Roles

  • Buyers — Purchase xAssets with USDC on the primary market, gaining access to wrapped assets for DeFi use.
  • xAsset Holders — Use wrapped tokens on Sonic for DeFi without bridging or losing yield.
  • Redeemers — Burn xAssets to withdraw the underlying assets or equivalent value back via ODX.
  • Protocols & Builders — Integrate xAssets as native primitives for liquidity, lending, derivatives, etc., on Sonic.

Benefits Summary

  • No need for user deposits or cross-chain bridges; ODX handles asset acquisition and custody.
  • Assets remain productive (yield + DeFi utility) simultaneously, with market-aligned pricing.
  • Institutional custody provides enterprise-grade security and compliance.
  • Exclusive to Sonic, enabling focused liquidity depth on a high-performance chain.

The ODX protocol creates a unified liquidity layer for Sonic by bringing external assets onchain in a secure, verifiable, and yield-preserving manner via primary market access.

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