# FAQs

**General FAQs:**

1. **What is Xloop Finance?**
   * Xloop Finance is a borrowing protocol on Arbitrum harnessing yield looping in a novel dual-layer, three-token system powered by an over collateralized stablecoin.
2. **How does Xloop work?**
   * Xloop uses a novel architecture that splits a typical stablecoin into $IOU and $XDC tokens, and involves a governance token $XLOOP for minting and redemption. This novel dual-layer, three-token system ensures clear risk compartmentization of internal and external risks.
3. **Is Xloop open source?**
   * Yes, Xloop Finance is committed to open-source principles, and its codebase is available for review and contribution.
4. **What is the purpose of the governance token in Xloop?**
   * The governance token allows holders to participate in platform governance decisions and may play a role in minting and redeeming XDC stablecoins.
5. **How can I participate in Xloop's governance?**
   * To participate in governance, you can acquire governance tokens and vote on proposals or initiatives.


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