$USX is generated, backed, and kept stable through collateral assets deposited into treasury funds on the XLUNA Protocol. A collateral asset is a digital asset that XLUNA holders have voted to accept into the Protocol.
To generate $USX, the XLUNA Protocol accepts any asset that XLUNA holders have approved as collateral. XLUNA holders must also support specific, corresponding Risk Parameters for each accepted collateral (e.g., more stable assets might get more lenient Risk Parameters, while more risky assets could get stricter Risk Parameters). These and other decisions of XLUNA holders are made through the XLUNA decentralized governance process.