The staked xUSD pool receives a share of all redemption & liquidation fees from the protocol. Users of the xBacked protocol that stake xUSD receive a a pro-rata distribution of these fees based on their ownership of the pool.
You will also receive discounted collateral from your staked xUSD, which is used in liquidations.
What happens when a Vault is liquidated using my xUSD?
The way staking xUSD for liquidations works, means that bots are able to run liquidations on your behalf. You might stake 500 xUSD, and a bot could use 100 xUSD in a liquidation.
You would receive a discount to the market (e.g buy $100 of colalteral for 98 xUSD), the bot would receive 0.5% of the collateral, and the protocol will take a 1% fee.
You will be able to set prices for your xUSD to be used in liquidations, effectively acting like a limit order for an asset. For example, you might only allow liquidators to use your xUSD when the price of Algo is below $0.3, or some other support level.