> For the complete documentation index, see [llms.txt](https://xloop-finance.gitbook.io/main/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://xloop-finance.gitbook.io/main/tokens.md).

# Tokens

**$IOU**: This token serves as an internal accounting unit within the Xloop Finance system, representing a unit of debt denominated by $1. It's designed to have an intrinsic value that's overcollateralized and completely system-centric, meaning it's isolated from market exposure.

**$XDC**: This token Xloop Finance's native stablecoin, which aims to hold a steady value pegged at $1. The value of $XDC is underpinned by $IOU collateral. Leveraging the dynamic adjustment and arbitrage mechanisms that are popularized by Frax, $XDC's value can be efficiently stabilized. This stability enables $XDC to serve as a reliable medium of exchange within the DeFi space.

**$XLOOP**: This is the native governance token of the Xloop Finance system. Its specific roles and functions are still being developed, but it's expected to play a pivotal role in the fractional minting mechanism. Unlike the $LQTY tokens of Liquity, holding $XLOOP tokens can be associated with a positive market price expectation. This difference is largely due to the adoption of the fractional minting mechanism in the Xloop Finance system. This unique system design potentially allows for value accrual to $XLOOP tokens when the protocol is growing and performing well, hence creating an environment for positive price expectations. As such, $XLOOP holders are not just governance participants, but also potential beneficiaries of the protocol's success.


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