The market is quite volatile right now, and topics around leverage and stablecoin yields have been very hot.

Many people look at @protocol_fx and divide it into two parts: one is doing ETH and BTC leverage, the other is doing stablecoin yields.
That view isn’t wrong, but it easily misses the core that truly determines how large the protocol can become: Long, Short, and the Stability Pool actually share the same pool of liquidity and feed each other.
When Long opens an xPOSITION, the protocol mints fxUSD according to the leverage target, increasing supply. Short uses fxUSD as collateral to borrow wstETH and build positions, putting fxUSD into real trading demand. One creates the coin, the other circulates it, and the Stability Pool in between catches liquidity needs from both sides.
Users deposit USDC, fxUSD, or enter through fxSAVE, providing a buffer for the peg and the Liquidation Brake. Currently, the Stability Pool is about $52 million, and fxSAVE is about $51 million+, with an APY of around 4.7% to 4.8%. These yields come from staking of collateral assets, position fees, and FXN emissions; they are not fixed interest and will change with demand on both sides.
fxUSD supply is currently about $49.8 million, with reserve assets of about $72.2 million, so the overcollateralization safety cushion remains. If Long demand weakens, new fxUSD issuance slows; if Short weakens, usage and fees decline; if the Stability Pool undergoes large withdrawals, the room for peg maintenance and rebalancing shrinks.
So I prefer to view f(x) as a two-sided market. TVL, APY, and leverage multiples are just the current snapshot. Whether the three types of capital can continuously provide capacity for each other is what determines the ultimate scale of this system.
Next, what’s more worth observing is whether leverage demand will grow first, or the real usage of fxUSD will expand first?