The biggest illusion on-chain is thinking that just because you can see the data, you understand the risks. A Vault showing a decent APY doesn’t mean there’s no underlying liquidity mismatch. A stablecoin with a pegging mechanism doesn’t guarantee it will hold its peg during extreme market conditions. When evaluating a product, we should break down the surface-level results and examine the mechanisms it relies on: Who’s borrowing the money? Who can adjust the parameters? What happens if something goes wrong at the base layer? Are there liquidity constraints when exiting? Take our @protocol_fx’s fxUSD as an example—the peg is designed with multiple layers: Layer 1: Stability Pool. fxUSD and USDC are automatically swapped at market price, pulling the price back if it deviates. Layer 2: Funding Fee. If the USDC in the Stability Pool isn’t sufficient, the protocol charges temporary funding fees to leveraged positions, incentivizing more USDC to flow in. Layer 3: Redemption Floor. Anyone can redeem fxUSD for wstETH or WBTC at $1, with a 0.5% redemption fee. If USDC itself loses its peg, the protocol will suspend peg maintenance, temporarily halt USDC deposits, and avoid bringing external risks into the system. All these boundaries are clearly documented—nothing is hidden. Protection mechanisms are there to manage risks, not to pretend risks don’t exist. Before looking at APY, first check the fund flow. Before evaluating the stability mechanism, first understand what it depends on. fx Protection Mechanism Docs ➡️ https://fxprotocol.((gitbook.io))/fx-docs/risk-management/advanced-peg-protection-mechanisms fx Stability Pool Docs ➡️ https://fxprotocol.((gitbook.io))/fx-docs/f-x-protocol-mechanisms/stability-pool