Coin overview
USUAL
Ended--
Last price (USDT)
302.03K
24h total (USDT)
6.44M
Total vol (USDT)
2024-11-14 12:00:00 ~ 2024-12-18 10:30:00
Trading time (UTC+0)
2024-12-18 12:00:00 ~ 2024-12-18 16:00:00
Delivery time (UTC+0)
Total supply554.40M
Resources
Introduction
Usual is an on-chain version of Tether, aggregating Real-World Assets (RWAs) and issuing USD0, an institutional-grade stablecoin. Unlike traditional revenue-sharing models, Usual operates on an innovative ownership-sharing model. The protocol is governed by the USUAL token, which redistributes both value and control to its users. USUAL Total supply: 4,000,000,000
A whale redeemed 11.23 million USD0++, with a total loss of $999,000
@ai_9684xtpa monitored a whale redeeming 11.23 million USD0++, resulting in a loss of 99.9 thousand US dollars. In the past 15 hours, it chose to use a combination of two exit modes: 4.8 million USD0++ was directly exchanged for USD0 through Curve, at approximately 9.11% discount; the remaining 6.43 million USD0++ went through the official exit channel and a total of 1.042 million USUAL was confiscated as punishment, at approximately 9.12% discount.
Mango DAO votes to shut down following SEC settlement
A version of this article appeared in our The Decentralised newsletter on January 14. Sign up here. GM, Tim here. Mango DAO votes to shut down trading platform. Usual defends bond token rule change. Thorchain’s DeFi pause shakes investors. Mango DAO shuts down Mango DAO, a digital collective that manages the Mango Markets trading platform, is voting to shut down. Three proposals designed to force users to close their trading positions and prevent them from opening new ones were created on January 11. So far, two of the three proposals have passed. The votes mark the end of a turbulent, months-long saga at the decentralised autonomous organisation. In August, DAO members ratified a proposal to settle a lawsuit brought against the app’s creators by the Securities and Exchange Commission. The settlement stipulated that the DAO would destroy the MNGO governance token and pay a hefty fine to the regulator. Then in October, Mango Labs brought legal action against two senior contributors, accusing the pair of running a fraudulent scheme to enrich themselves at the DAO’s expense. Mango Markets was once one of the Solana blockchain’s leading DeFi apps with over $200 million in deposits. In 2022, crypto trader Avraham Eisenberg, stole $115 million from the protocol by exploiting a vulnerability in the way the app calculated asset prices. Eisenberg was convicted by a federal jury for fraud and market manipulation in April. Usual addresses controversy DeFi app Usual apologised for the chaos caused by its decision to cut the fixed price of the staked, bond-like version of its USD0 stablecoin. The $1.6 billion protocol blamed the confusion on users misunderstanding the protocol’s mechanisms. “The end of the 1:1 mechanism and the introduction of Early Unstaking were scheduled for early 2025, as has always been visible on the dApp itself since October 2024 and the whitepaper since November 2024,” Usual said in an X article. The incident highlights how in DeFi, where proponents lionise the sector’s ability to create a trustless financial system, developers at many popular apps still retain the power to shake markets without recourse. Previously, holders of the staked version of Usual’s dollar-pegged USD0 stablecoin could redeem them for at least $0.9995, as governed by the protocol’s code. But on Thursday, Usual updated its code so staked USD0 could only be redeemed for $0.87. The move plunged DeFi into chaos. Usual users and investors said the change was unexpected, and not adequately communicated ahead of time. Thorchain’s RUNE drops Concerns over the solvency of DeFi apps on Thorchain have shaken investor confidence, resulting in a 25% drop for its native RUNE token. On January 9, Thorchain founder JP Thorbjornsen implemented a 12-month pause for Thorchain’s Savers and Lending programmes in response to fears that the apps may not be able to return funds to depositors. There are 3 sources of RUNE inflation in the price. 1) THORFi - this is now timed out for 12 months. No longer a concern for now. We will get users liquidity in the app layer then restructure after 12 months. 2) Emissions. This year I’ll work with community to look at how… — JP.THOR | ACEL (@jpthor) January 9, 2025 Hours after the pause, three Thorchain nodes whose owners disagreed with the move reversed it, re-opening withdrawals. The episode shook investors, who, fearful that their funds could become trapped, withdrew some $75 million off the blockchain. Thorchain lets crypto users trade native assets between separate blockchains without the need for a centralised intermediary like crypto exchanges Coinbase or Kraken. It’s a popular tool among crypto diehards who want to distance themselves from centralised products for security and privacy reasons. In 2021, the RUNE token hit an all-time high of $20.87. It now trades at just $3.14 — an 85% decline. There’s a growing consensus among the Thorchain community that the amount of new RUNE tokens minted as rewards for DeFi participants should be reduced. This week in DeFi governance VOTE: Aave DAO mulls app deployment on Bitcoin layer 2 Rootstock VOTE: Uniswap DAO to adopt SEAL Security Alliance’s Safe Harbour Agreement VOTE: Arbitrum DAO continues Stable Treasury Endowment Programme Post of the week Crypto Twitter pokes fun at those caught up in the USD0++ snafu. dad, did you buy a 4 year zero coupon at par? pic.twitter.com/Alxq4OTjzO — SS (@sshxbt) January 10, 2025 Got a tip about DeFi? Reach out at [email protected].
USD0++ continues to “break away from the anchor”, should we hold on or run away now?
Original | Odaily Planet Daily ( @OdailyChina ) Author: Azuma ( @azuma_eth ) Since Usual announced the cancellation of the 1:1 unconditional exit mechanism of USD0++/USD0 on January 10, USD0++ has continued to be discounted. As of now, the maximum liquidity ratio of USD0++ / USD0 on Curve has tilted to 8.18%:91.82%, and the real-time quote of USD0++ is approximately US$0.93. USD0 and USD0++ What is USD0 ? What is USD0++ ? What is the relationship between the two? The so-called USD0 is a fully collateralized stablecoin issued by the stablecoin project Usual. USD0 is backed by various short-term U.S. Treasury bonds at a 1:1 ratio (similar to USDT and USDC, but the Treasury bonds do not need to go through the banking system), and the collateral assets can be redeemed at any time at a ratio of 1:1. This is why, when the panic surrounding USD0++ continues, USD0 has always maintained a good anchor. The so-called USD0++ is the pledged version of USD0 , with a pledge period of four years. After staking USD0 , users can obtain USD0++ as a liquidity certificate token (LST) at a 1:1 ratio, and will receive pledge income paid in USUAL every day during the period (note: this means that the yield of USD0++ is volatile). In other words, USD0++ can be understood as a four-year bond of USD0 . Cause of drastic change: adjustment of exit ratio In the traditional financial market, the trading price of multi-year bonds like USD0++ in the secondary market is not fixed at 1:1, but is affected by multiple factors such as changes in credit risk, changes in bond terms, changes in liquidity demand, changes in yield expectations, etc. However, in the early days of Usual, in order to attract more funds to deposit, Usual provided a temporary 1:1 unconditional exit channel. This actually means that users can enjoy staking without being restricted by the four-year staking period. After that, a large amount of funds poured in, and many users even began to conduct revolving loans on Morpho in order to further amplify their returns through leverage. In the early days when USUAL was not launched, users staking USD0 in exchange for USD0++ was actually blind mining (because the yield of USD0++ was linked to the price of USUAL); later, USUAL continued to rise after its launch, which also stimulated users enthusiasm for staking; however, since the end of 2024, USUAL has begun to decline gradually, which has caused the yield of USD0++ to gradually decline, and users withdrawal tendency has gradually increased. At this time, users can still redeem without loss through the 1:1 unconditional exit channel provided by Usual, which also makes the price of USD0++ always maintain a good anchor (the term bond is not quite accurate, but it is easier to understand). However, this channel will obviously not exist for a long time (otherwise the pledge will be meaningless). In fact, in a market environment with a stronger exit tendency, Usual still needs to forcibly maintain this exit channel through subsidies. On January 10, Usual officially announced that it would no longer support 1:1 unconditional withdrawal and opened two new withdrawal channels: Conditional exit: Continue 1:1 redemption, but require confiscation of part of USUAL earnings. Details of this channel are planned to be released this week. Unconditional exit: redemption at a floor price ratio of 0.87:1, which will gradually recover to 1:1 over time. As soon as the news came out, panic immediately began to spread in the community - (not considering the conditional exit mechanism whose details have not yet been finalized) you had 1 USD0++ , and you could exchange it for 1 USD0 yesterday , but today you can only exchange it for 0.87 USD0 , who wouldnt panic? The market reacted instantly, and a large number of users immediately began to sell through the secondary market (whoever runs faster, whoever keeps more). Some users had to unleverage in panic, which further exacerbated the selling of USD0++ . Curve data shows that USD0++ / USD0 has touched a short-term low of around 0.9. The current dilemma: hold or sell? As the panic sentiment has relatively subsided, the current price of USD0++ is roughly around US$0.93, which is also the result of the current market game. There are two main focuses in this game. One is the proportion of USUAL earnings confiscation required by the conditional exit channel; the other is whether Usual will activate the earnings switch in advance . The results of these two key variables will be revealed this week. Odaily Note: The so-called income switch allows Usual to share its income from real-world assets and protocol operations with the community. Usual expects monthly revenue to be approximately US$5 million, and the annual return rate will exceed 50% under current conditions. First, let’s look at the first major focus, which is the proportion of profit confiscation for “conditional exit”. Considering that the Curve liquidity pool available for secondary resale of USD0++ has been seriously tilted and is on the verge of failure, the subsequent exit of USD0++ will mainly rely on the two major channels provided by Usual. Therefore, this ratio will directly determine the approximate fluctuation range of USD0++ in the short term: If the comprehensive confiscation ratio exceeds 13%, it is expected that USD0++ will continue to drop to around 0.87 USD - the unconditional exit 0.87:1 bottoming ratio will take effect; If the comprehensive confiscation ratio is lower than 13%, the USD0++ price is expected to continue to fluctuate and gradually stabilize at the discount level of the corresponding confiscation ratio . If 10% is confiscated, it is expected to fall again and stabilize around $0.9; if 3% is confiscated, it is expected to rise and recover to around $0.97. In the long run, whether USD0++ can be effectively repaired depends more on the second focus, namely the activation of the yield switch. As mentioned earlier, the trading price of multi-year bonds in the secondary market will not remain fixed at 1:1, but will be affected by multiple factors such as changes in credit risk, changes in bond terms, changes in liquidity demand, changes in yield expectations, etc. There has been no change in the underlying mechanism of Usual and the collateral status of USD0 for the time being, so there is basically no change in credit risk. Previously, the sharp discount of USD0++ due to the adjustment of the exit ratio could be attributed to changes in bond terms (adjustment of redemption ratio) and changes in liquidity demand (increased exit tendency, fast running, and leverage). What remains is the change in expected yield. If the opening of the yield switch can effectively boost the price of USUAL, it will increase the yield of USD0++ , and then reverse the supply and demand of pledge. In this case, the liquidity pool of USD0++ on Curve will gradually balance (compared to 1:1 pledge, USD0++ can be obtained at a discount), and the price performance of USD0++ will no longer rely on the official exit channel, but will fluctuate naturally like a regular multi-year bond. In summary, the current selling pressure surrounding USD0++ is more of a panic result after the recent sudden change in the exit mechanism. The operation of the Usual protocol itself has not suffered any systemic failures (but the acceleration flywheel in the rising mode has been temporarily broken). As far as the current situation is concerned, it is recommended to wait and see the results of the two major variables that will be determined this week before making any subsequent considerations.
Usual announced that the 1:1 early unstaking function will be launched tomorrow
On January 13th, Usual announced that the income conversion function for USUALx holders has been activated. Users who held USUALx positions this week will be eligible for last week's collateral income distribution. The 1:1 early redemption function will be launched tomorrow, along with all related rules, and users can choose farming and redemption strategies. In the Usual ecosystem, income redistribution operations are transparent and simple: 1. 90% of the USUAL token supply is allocated to the community. 2. 100% of collateral income is distributed weekly to USUAL stakers and rewarded in USD0. Detailed documents on the distribution mechanism will be released this week. A new staking mechanism will be launched soon, aiming to create a more autonomous and elegant redistribution system. Weekly reports will also be published, allowing everyone to verify on-chain income.
Usual Protocol activates revenue switch amid redeem function debate
Can Usual’s revenue switch deliver on its promises amid growing concerns? The Revenue Switch, a mechanism designed to distribute 100% of Usual’s ( USUAL ) protocol revenue to USUALx stakers, has been launched by the USUAL token and USD0 stablecoin ecosystem creators. While the initiative marks a significant step forward for decentralized finance, its debut is accompanied by ongoing community concerns about recent changes to the protocol’s redeem function. Activated on Jan. 13, 2025, the Revenue Switch enables USUALx stakers to receive protocol-generated revenue, estimated at $5 million per month, directly in USD0. This mechanism links token value to actual earnings, aiming to incentivize long-term staking and support sustainable protocol growth. Starting today UTC+0, the Revenue Switch was activated for USUALx holders. Those holding their USUALx positions throughout this week will be eligible for the distribution of last week’s collateral revenues. More details here & on the dApp: https://t.co/syOdYwHXW5 The 1:1… — Usual (@usualmoney) January 13, 2025 As of Jan. 14, 2025, the USUAL token is trading at $0.5319, with a market capitalization of $275.68 million and a 24-hour trading volume of $194.6 million. Approximately 36.53% of the token supply is staked, offering an annual yield of 275%, 42% in USD0 rewards, and 233% in USUAL. USUAL 1D chart | Source: CoinmarketCap Despite the excitement surrounding the Revenue Switch, the protocol has faced criticism over its decision to update the redeem function for USD0 stablecoins. The new feature allows for temporary suspension of redemptions under specific conditions, such as during periods of market volatility or liquidity constraints. While USUAL has clarified that this change is intended to maintain stability in extreme scenarios, it has raised concerns about the concentration of control and potential implications for decentralization. The introduction of the Revenue Switch and adjustments to the redeem function form part of USUAL’s broader strategy to secure its position as a leading DeFi protocol. The Revenue Switch aims to enhance the utility of USUAL tokens, stabilize returns for stakers, and provide a transparent mechanism for revenue distribution. USUAL has also indicated plans to refine its model in the coming months, incorporating advanced staking and governance frameworks inspired by the “veModel” used in other DeFi projects. As USUAL navigates these developments, the success of the Revenue Switch may serve as a proof of concept for revenue-based tokenomics , potentially influencing future practices in the sector. At the same time, the protocol’s response to community concerns will be closely watched, as it could impact trust and adoption in an increasingly competitive DeFi ecosystem.
Lies, Deception, Motivation: USD0++ Decoupling Incident
Article Author: DC | In SF Article Compiled by: Block unicorn Usual's USD0++ is currently trading below one dollar, but it is said that this has always been part of the plan. Before the decoupling event occurred, I was writing an article about Usual, as it has recently garnered a lot of attention. It is one of the fastest-growing stablecoin protocols and has recently partnered with Ethena, earning significant profits for many YT miners on Pendle. However, if you ask people what Usual does, you often get a variety of answers. "It provides you with yields based on RWA (real-world assets)." So the natural question is: how is this different from Ondo? "Oh, it decentralizes RWA yields," well, isn't Maker or Sky doing that too? And so on. If you look closely, @usualmoney's product is a token, not any actual product. Essentially, if the risk-free rate that users receive is above 4%, then the source of the yield is the users themselves. But how did we get here? Why did a protocol with a TVL of over a billion dollars suddenly collapse so quickly? What exactly is the mechanism behind Usual? How do USD0 and USD0++ work? USD0 is Usual's standard, non-yielding stablecoin. There isn't much to interpret here, but things get interesting once you delve into USD0++. Despite the similar name, USD0++ is not essentially a stablecoin. Initially, USD0++ could be exchanged for USD0 on a 1:1 basis, and USD0 could be exchanged for 1 dollar. However, the project states in its documentation that at some point in the first quarter of 2025, this will change, and USD0++ will function more like a bond, with a lower limit based on the effective price of a 4-year U.S. Treasury bond, while the actual underlying yield paid will be zero. Naturally, the community expects this change to be announced in advance, and there will be some process allowing users to exit if they no longer wish to participate in liquidity mining or choose to hold for a longer time and accept the higher risk that comes with it. Regardless of what changes occur in the first quarter of 2025, as soon as this change is announced, the value of USD0++ will plummet. Holders of USD0++ will no longer hold it solely for its dollar value but because they believe the $USUAL tokens they will receive are worth locking up for a longer period. Conflicts of Interest To facilitate liquidity mining, the liquidity pools for USD0 and USD0++ have been deployed across multiple platforms, including Morpho and Euler. Morpho's risk management is outsourced to other managers, including MEV Capital, which plays an important role in this story. MEV Capital's reputation has become somewhat dubious in certain circles—they have previously caused losses for investors and covered it up with questionable accounting practices. Additionally, one of MEV Capital's shareholders, @AdliTB, is also a co-founder of Usual, which clearly presents a conflict of interest. MEV Capital's responsibility is to help lenders manage risk, not to indiscriminately direct large amounts of capital towards Usual. To achieve this, MEV Capital used a vault that hard-coded the value of USD0++ to 1 dollar. In other words, its Oracle effectively assumes that the value of USD0++ is always 1 dollar, regardless of market prices. Another well-known protocol operating in a similar manner is Anchor, which played a key role in the UST collapse. While there may be some justification for this approach, it is irresponsible to adopt such a method on assets that will eventually have their liquidity removed. Euler's oracle uses market prices to operate, leading to liquidations, and many of Usual's liquidity pools now seem to hold a significant amount of bad debt. One Dollar Turns into 80 Cents: The Decoupling Event Instead of announcing that liquidity mining users could exit, the Usual team actually chose to launch a "raid" on its users and all parties using Usual assets. According to @GauntletXYZ, at 4:56 PM Eastern Time, Usual notified Gauntlet and other @MorphoLabs managers via Telegram that the unconditional 1:1 redemption mechanism for USD0++ in the primary market was immediately terminated. At the same time, the team released a public tweet announcing this change and stated that two new mechanisms would be introduced: a price protection mechanism with a floor price of 0.87 dollars and a 1:1 early uncollateralization mechanism for converting USD0++ to USD0, which is expected to be available next week. Once the news broke, USD0++ began to decouple, dropping several percentage points within a few hours. As Euler's oracle correctly calculated that the debt positions were becoming unhealthy, Euler began liquidations. Prices continued to fall, and MEV Capital's liquidity pools began to suffer as interest rates surged due to borrowers withdrawing and traders leveraging to profit as the price of USD0++ rebounded. Reasons People Buy and the Pyramid Supply Structure of $USUAL In my view, this situation and the potential for trapped funds to explode seem highly likely to occur at some point, but the team's extreme changes, without any warning, and their shocking, misleading, or even completely false statements are truly unbelievable. In reality, most participants in Usual are actually liquidity mining its tokens, and the team is well aware of this. If they had not operated in this way, one might reasonably assume they were trying to create a positive flywheel effect. However, the announcement of this method was clearly intended to catch users off guard and deprive them of the opportunity to choose between withdrawing or continuing to participate, making this situation appear more like a "honeypot." The team's claim that "this change will occur at some point in the first quarter" is both dishonest and infuriating. We are only ten days into a 90-day quarter, which is clearly designed to catch people off guard. For such a significant change, most people expect some advance warning. Furthermore, the team clearly knew what would happen. This can be directly seen from Usual's announcement: "Encourage high-leverage positions in the USD0++/USDC Chainlink Oracle Morpho market to improve their health factors to maximize safety during this volatility, during which arbitrage bots may not yet effectively maintain the floor price." To compensate and improve health factors, miners had to sell USD0++ that no longer had any value support! Despite the team beginning to backtrack in the face of significant opposition, even as some miners threatened legal action, they still have not fully acknowledged their responsibility for failing to communicate the fundamental changes to USD0++. Some General Thoughts Many smart people I know were surprised by this. I believe that changing the redemption rules for USD0++ arbitrarily without any reasonable warning cannot be considered an act of integrity, and it may be illegal (absolutely so in the U.S. and likely in France as well), but that does not necessarily mean there will be consequences. This should not be used to attack Morpho, as the Morpho system is manager-centric. One manager colluded directly with the protocol, which now actually strengthens the position of those managers who did not collude, further solidifying Morpho, whose model is designed for such events. Different approaches do not mean incorrect approaches. Overall, caution is needed in the pursuit of yields and trading, especially in the crypto space. Do your own research, understand the team, and if there isn't a good system to obtain yields (see @ethena_labs), then the source of the yield is yourself. If you are the source of the yield, either participate in the game like Curve / Velo / Aero or do not participate at all. Bad teams exist, and they should be exposed and condemned. In my view, even if the team is not bad, the way this decision was executed is terrible, bordering on criminal. However, the crypto and DeFi space remains a wild west, so do your own research; where there is smoke, there is always fire.
Usual Protocol Introduces Revenue Sharing and Early Payouts to Restore Stability
The Usual Protocol has taken steps to address recent concerns about its USD0++ floor price mechanism, unveiling two key updates designed to enhance trust and improve its long-term viability. After the USD0 stablecoin lost its dollar peg, the protocol announced a new early payout feature. Starting next week, users will have the option to redeem their assets at a 1:1 ratio by forfeiting a portion of their accrued rewards. This payout system, which spans a maximum of six months, is intended to provide users with more flexibility while alleviating liquidity challenges. Additionally, the protocol has decided to accelerate its revenue-sharing initiative. Beginning Monday, holders of USUALx tokens will receive weekly revenue distributions in USD0. READ MORE: Biden Pushes Controversial Crypto Regulation in His Final Days as U.S. President Usual Protocol estimates monthly revenues of around $5 million, translating to an annual percentage rate (APR) of over 50% under current market conditions. In a statement, the team emphasized that these measures aim to bolster the protocol’s sustainability and address community concerns. By advancing its revenue distribution timeline and offering liquidity options, the Usual Protocol seeks to restore confidence among its users. Source SHARE: 0 SHARES
The market value of the usual stablecoin USD0 has been surpassed by USDS, dropping it out of the top five in the stablecoin rankings
Data from DefiLlama shows that the market value of USD0, a stablecoin product backed by real-world assets launched by developer Usual, has dropped to 1.54 billion US dollars. It was overtaken by USDS (1.761 billion US dollars), dropping to sixth place in the stablecoin rankings; it decreased by 15.09% over the past 7 days.
Usual: Appropriate caps have been set for all Morpho markets
On January 12th, the RWA stablecoin project Usual announced that appropriate limits have been set for all Morpho markets and strongly advised users to migrate their positions to the new market as soon as possible. Rewards for the original market have been abolished, and liquidation and bad debt commitments have been restricted to the capped custody pool. Usual stated that it has successfully protected lenders in the custody pool from the impact of bad debts, but does not recommend continuing to lend directly to that market. Additionally, Usual clarified that any custodians, including MEV Capital, were unaware of the execution of the floor price before the update on the chain. In previous news, Usual released a statement yesterday regarding the USD0++ anchor off, stating that it is actively ensuring that there are no bad debt issues in the current lending market. All proceeds from liquidation will flow directly into the DAO treasury, ultimately benefiting USUAL holders.
Web3 Lawyer: Centralized USDT Has No Future, What Will the Future of Stablecoins Be?
Author: Mankun Blockchain Blockchain, as a comprehensive technology that originated from Bitcoin, inherently carries a strong financial attribute and a spirit of liberalism to some extent. However, under the eaves, people have to bow their heads; to prevent being targeted by mainstream regulatory bodies, the vast majority of Web3 projects strive to prove that their tokens are utility tokens rather than security tokens. The troubles between projects do not resonate with each other. In the world of Web3, there is another type of token that fears users not treating it as money, and that is stablecoins. After all, as a medium of payment, the most challenging issue is stability (the Russian ruble might have something to say about that…). The narrative logic of stablecoins is actually quite simple: if I have $1 in my bank account, I issue 1 coin on the blockchain. The focus is on emotional and price stability. To some extent, stablecoins combine the stability of traditional currencies with the decentralized advantages of blockchain technology, becoming a bridge that connects the real world with the on-chain world, undoubtedly becoming one of the first large-scale applications of blockchain technology in ordinary people's lives. However, as stablecoins like USDT gradually dominate the market, we suddenly realize that the dragon-slaying youth has become a dragon. Tether, as the issuer of USDT, is a core hub in the global Web3 industry, holding over 65% of the global stablecoin market share, generating hundreds of millions of dollars in revenue from stablecoin operations each year. However, it is the most traditional centralized Web2 business. The issuance and freezing of USDT entirely rely on a centralized issuer, and its information transparency is relatively low, with profits almost unrelated to users, and governance power highly concentrated. These three points are acceptable in traditional internet companies, but when applied to a pillar company in the Web3 industry, it becomes critical because this is not Web3 at all! It is important to know that the core concepts of Web3 can be summed up in a few words: open transparency, trustworthiness, and value sharing. These concepts seem to have nothing to do with Tether, a centralized stablecoin company. So the question arises: can we make the important Web3 application of stablecoins a bit more Web3? Perhaps this is the key to the next generation of stablecoin development. In today’s article, lawyer Honglin wants to share a recently researched project with everyone, further exploring how to achieve an innovative model that combines decentralization with stablecoins. Naturally, the content of this article is for learning and exchange purposes only and does not constitute any investment advice. Usual Stablecoin Project Introduction Usual is a decentralized fiat stablecoin issuance platform dedicated to breaking down the barriers between traditional finance and decentralized finance (DeFi), linking traditional finance with decentralized finance (DeFi). Usual centers around three core products: · Usual Stablecoin: Designed specifically for payments, trading counterparts, and collateral use. · Usual LST (Ordinary LST): A yield-generating product. · Usual Governance Token: Grants holders decision-making power within the protocol. Usual aggregates tokenized real-world assets (RWA) from well-known institutions like BlackRock, Ondo, Mountain Protocol, M0, or Hashnote, transforming them into permissionless, on-chain verifiable, and composable stablecoins, thereby enhancing the liquidity of traditional illiquid assets and making it easier for more investors to access these assets. More importantly, it redistributes ownership and governance through the $USUAL token, allowing community members to become owners of the platform's infrastructure, funds, and governance, promoting the integration of the Web3 world with the real world. Through Usual's design, the issuance of stablecoins is not just about the digitization of assets but also a reconstruction of the traditional financial system. The founder of Usual is Pierre Person, born on January 22, 1989, who was a member of the French National Assembly for the 6th constituency and has long been active in politics as an electoral advisor and political ally to French President Macron. Pierre Person's political background and understanding of blockchain technology enable him to lead the Usual team from a unique perspective, promoting the integration of Web3 with traditional finance. As a member of the French Socialist Party, Pierre participated in important legislative projects such as LGBT healthcare and cannabis legalization during his tenure, showcasing his cross-disciplinary thinking and innovative capabilities. In terms of project financing, Usual has attracted attention and funding support from several well-known investment institutions. In April 2024, Usual completed a $7 million financing round led by IOSG Ventures, with participation from GSR, Mantle, Starkware, and others. In November, Usual completed a new financing round of $1.5 million, with Comfy Capital and early crypto project investor echo also injecting funds into the project. In December, Usual announced the completion of a $10 million Series A financing round led by Binance Labs and Kraken Ventures. These investments not only provide Usual with necessary capital support but also offer rich industry resources and strategic guidance for project development. Characteristics of Usual Stablecoin Project Unlike traditional centralized stablecoins, Usual's USD0 stablecoin exhibits unique advantages in stability, transparency, yield distribution, and decentralized governance. · Choice of Collateral Assets and Transparency Unlike traditional stablecoins backed by cash, commercial paper, and other short-term assets, USD0 chooses ultra-short-term real-world assets (RWA) as collateral, including U.S. Treasury bonds, overnight reverse repurchase agreements, etc. Holders can earn yields by converting USD0 into USD0++, with yields in the form of $USUAL tokens or risk-free USD0. Moreover, the collateral assets of USD0 are on-chain transparent and verifiable, allowing users to check and verify the assets supporting USD0 at any time on-chain. This practice not only enhances transparency but also helps build user trust in the protocol. · Innovative Yield Distribution Mechanism The profits of traditional stablecoins mostly belong to the issuer, and users cannot directly benefit from them. However, the design of USD0 considers a fairer and more transparent distribution mechanism. 100% of USD0's profits flow into the protocol treasury, and 90% of the $USUAL tokens are distributed to community members. Community members include not only users but also liquidity providers and contributors. Through this design, USD0 ensures that users can share in the growth dividends brought by the protocol, rather than concentrating all profits in the hands of the issuer. Interestingly, users holding USD0 can convert it into USD0++ to earn more yields. This not only enhances user engagement but also allows users to benefit from the protocol's growth, truly realizing the concept of decentralization and yield sharing. In contrast, traditional stablecoins like USDT, although backed by a large amount of U.S. Treasury bonds, have most of the profits belonging to Tether, with almost no way for ordinary users to participate in profit distribution. For example, in the first half of 2024, Tether's net profit reached $5.2 billion, with almost all profits belonging to the company, and users did not share in this dividend. · Decentralized Governance and Transparent Management The decentralized governance of USD0 is one of its highlights. In the Usual protocol, community members are not only users but can also participate in protocol governance by staking $USUAL tokens. Users have a certain voice in the treasury and protocol decisions, meaning that the issuance and management of USD0 are not controlled by a centralized entity but are decided collectively by the community. The advantages of this decentralized governance are evident; it ensures that the protocol's decisions are not manipulated by a single interest party, better serving all participants. In contrast, traditional stablecoins like USDT are almost entirely controlled by Tether, with very limited space for user participation in governance. · Unique Advantages in Risk Management As mentioned earlier, USD0 chooses highly liquid and safe government bonds as collateral, reducing the impact of systemic risks from the banking system compared to commercial bank reserves. The short-term assets used by USD0 can effectively avoid situations of discounted liquidation during large-scale redemptions. If the asset's maturity is too long, it may be forced to sell at a low price to meet redemptions, but the maturity of short-term assets can reduce this risk. Additionally, all assets are tokenized and on-chain, allowing users to verify their liquidity and safety at any time. This transparency greatly enhances user trust in the protocol. Smart contracts automatically execute the issuance and management processes of USD0 and ensure price stability through arbitrage mechanisms. When the market price of USD0 deviates from its pegged value, arbitrageurs can buy and sell USD0 to restore its stability. Through these measures, USD0 can minimize price fluctuations and reduce systemic risks during large-scale redemptions. Conclusion With the continuous development of the Web3 industry, decentralized finance (DeFi) and cross-border payments have become the most promising application scenarios for blockchain. As an important tool connecting traditional finance and on-chain assets, the decentralized, transparent, and fair yield distribution mechanism of stablecoins will be key to the future development of stablecoins. One of the core concepts of Web3 is decentralization and user value sharing. The Usual project is based on this concept, innovatively combining the advantages of traditional finance with the decentralized spirit of Web3, creating a new stablecoin model through a more transparent, fair, and decentralized mechanism. It not only provides users with higher yields but also allows more community members to participate in protocol governance, sharing network value and business dividends. This model may very well be the true future of Web3.0 stablecoins.
After unanchoring from USD0++, Usual plans to activate the profit switch function and initiate 1:1 early redemption of collateral to stabilize the ecosystem
RWA stablecoin issuer Usual announced on the X platform that it has recognized the significant community response triggered by its collateralized stablecoin USD0++ deviating significantly from 1 US dollar. Therefore, a series of measures will be launched to address user concerns and stabilize the ecosystem. It is reported that the "Revenue Switch" feature is scheduled to launch on January 13th, allowing Usual Protocol to share its earnings from real-world assets and protocol operations with the community. The team expects monthly income to be about $5 million, under current conditions annual return rate will exceed 50%. These distributions will take place once a week in order to consolidate USUAL's actual value, balance its economic model and revenue generated by the protocol. (The Revenue Switch function of Usual will officially start when more than 50% of USUAL tokens are pledged as USUALx. If this requirement is not met, it will automatically activate on February 1st, 2025. Once activated, all profits (up to $5 million per month) will flow towards those who have staked their holdings in USUALx in form of USD0.) In addition, the Usual Protocol team also stated that they would launch a "1:1 Early Redemption" feature next week which allows users to exchange USD0++ at an exchange rate of one dollar but requires them to forfeit some accumulated rewards as punishment.
USD0++ loses 1:1 USD peg, panic reigns
On January 9, the stablecoin issued by Usual, USD0++, suddenly lost its 1:1 peg to the USD to around $0.937, with one USD0++ token now only redeemable for less than the expected $1. The sudden loss of stability compounds a rough start to the year that began with Usual’s token, once a market favorite, losing its momentum. The token price already dropped by over 30% within a week. Usual was one of the eye-catching stablecoin projects that emerged in 2024, launching on Binance at the end of 2024 with great market performance. It has the backing of French MP Pierre Person’s government background and Binance’s famed launchpad. The stablecoin markets saw a boom in 2024, with at least 23 stablecoin projects securing substantial funding ranging from 2 million to 45 million in the second half of the year. How the market reacted to USD0++ losing its 1:1 peg Crypto market analysts quickly took to X to warn their audience about further price drops in the future. The question everyone is asking now is whether USD0++ is about to become another UST. The USD0++ stablecoin fell to a low of $0.89 before rising to stabilize at around $0.93—about 7% below its intended $1 peg. The dual exit system provides users with two redemption options: A conditional exit: this option allows for 1:1 redemption at the $1 peg but demands that users forfeit a portion of accrued rewards. An unconditional exit: this option allows redemption at a current floor price of $0.87, but it is set to rise gradually to $1 over a period of four years. The abrupt changes to the protocol’s official documentation shocked many users, shaking out weak hands and leaving the stronger ones gasping for clarity. Stani Kulechov, founder of Aave, shared his opinions on the situation via a post on X. In his statement, he emphasized the risks linked with immutable price feeds. His comments also reflected broader community concerns regarding the implications of new redemption mechanisms, stating his preference for GHO, an alternative stablecoin. Other users have also echoed his sentiments as the market continues to react to the shocking update with significant volatility. Things got so bad that liquidity providers on platforms like Curve Finance and Pendle reportedly experienced sudden shifts that resulted in hundreds of millions in USD0++ leaving the DeFi ecosystem, raising fears of multimillion-dollar liquidations. See also Crypto trends 2025: Ether, XRP, Bitcoin lead wallet growth; but who’s losing? Responding to community concerns, Usual’s decentralized autonomous organization (DAO) has announced plans to cover any potential bad debt in non-migrable markets up to the current amount. Why did Usual settle on $0.87? There are two possible theories about why the official announcement set the unconditional exit ratio at a precise 0.87. One is the profit burning theory. Consider the possibility of the 0.87:1 ratio set in the official announcement triggering a profit evaluation among whale holders. Since the previous 1:1 guaranteed redemption strategy failed, losing the official guarantee, large holders now face the dilemma of selecting the best option among the “short ones.” If they go for conditional redemption, investors need to return part of their subsequent profits to the project. The problem is the details of this profit withdrawal have not been disclosed officially. Conversely, if they accept the unconditional redemption method, the worst-case scenario guarantees only $0.87, with the remaining $0.13 becoming the core of the game. Naturally, when either of the two exit methods offers higher returns, the more profitable one comes out on top. A well-designed mechanism should allow users the opportunity to choose rather than be “one-sided.” As such, the $0.13 gap likely means that the official has yet to disclose the portion of profits that need to be burned, allowing users to make a choice between the two methods. From the user’s perspective, if they have to pay a guaranteed cost of $0.13 later, they might as well sell at the current depegged price (currently around $0.94). USD0++ would then return to its economic essence as a bond, with $0.13 representing the discounted portion, while $0.87 reflects its intrinsic value. The other is the liquidation bottom line theory. Before the update, Usual’s mechanism allowed many large holders to safely take positions and obtain almost risk-free returns. This further increases leverage and capital efficiency via lending protocols like Morpho. See also Aptos Network incorporates Chainlink data feeds for verifiable data Typically, these users engaging in circular lending would collateralize their USD0++, borrow a certain amount of USDC, then exchange this USDC for USD0++, and subsequently initiate a new round of circular lending. These users, who benefited from circular lending, provided Usual with considerable TVL, continuously elevating the system. However, there is a liquidation line behind the TVL “perpetual motion machine.” In the Morpho protocol, the liquidation line for USD0 is determined by the Loan-to-Value ratio (LLTV). LLTV is a fixed ratio, and when a user’s Loan-to-Value (LTV) exceeds LLTV, their position is exposed to liquidation risk. At this time, Morpho’s liquidation line is set at 86%, just a step away from the 0.87 bottom line in the official unconditional exit. The 0.87 in Usual’s official announcement is just above Morpho’s 0.86 liquidation line. It can be likened to a final barrier set by the official to prevent systemic liquidation risks. The new update means many loans are now above the liquidation threshold. The situation is worsened by a hardcoded oracle, leading to an exodus of suppliers and a spike in borrow rates. Some users have called for on-chain hedging and liquidity buffers to mitigate such risks, emphasizing the importance of risk management in DeFi. Holders await further news next week There is still a lot of panic surrounding USD0++ in the market, but a majority of people have taken a cautious approach, holding their positions and waiting to see what happens. The market’s reasonable value for USD0++ is around 0.94, but all eyes are on official channels as people expect to hear detailed information on how the “unconditional exit” will burn and how much profit will be deducted next week. If the worst happens and Usual does not burn the anticipated 13 points next week and instead chooses to burn 0.5% of USUAL, then USD0++ could quickly re-peg to around 0.995. In short, the re-pegging of USD0++ is dependent on the burning details Usual is expected to announce next week. Regardless of how the final mechanism details are determined, holders of the tokens UsualX and USUAL are expected to benefit. The market’s exit method will decrease USUAL/USD0++ TVL, driving up the price of the USUAL token. From Zero to Web3 Pro: Your 90-Day Career Launch Plan
Usual protocol’s depeg spurs instability in DeFi markets
This is a segment from the 0xResearch newsletter. To read full editions, subscribe . Usual protocol, the shiny new stablecoin on the block, is seeing its USD0++ “stablecoin” (a popular misconception) lose parity with USD0 as of 17 hours ago. It’s now trading at about $0.92. But of course, USD0++ is not a stablecoin. It’s a liquid staking derivative of the USD0 stablecoin, somewhat like Lido’s stETH compared to ETH. (The USD peg of USD0 is fine, and the underlying T-bills have no backing issue.) Usual’s business model is based on the idea of an “onchain Tether” that rewards users. By staking USD0 for USD0++, you receive the underlying T-bill yields and rewards in the protocol’s native token, USUAL. Should USD0++ stakers change their minds before maturity, they can exit by forgoing rewards and unstake back to USD0 at a 1:1 exchange rate. This first exit option will be available as of next week . This explains why the “depeg” between USD0 and USD0++ isn’t exactly a flaw. Think of USD0++ as a bond with four-year maturity. That bond should technically be trading at a discounted rate to reflect a risk premium for holding it for four years. Economists call that the “time value of money.” Recall that in June 2022, Lido’s stETH too, depegged from ETH amid financial troubles around the now-defunct Celsius . Newsletter Subscribe to Blockworks Daily Subscribe Market panic led to LPs pulling stETH liquidity from Curve pools, causing massive liquidity imbalances and a stETH:ETH depeg. Just like stETH does not necessarily have to trade at parity with ETH, USD0++ does not have to trade at parity with USD0. What’s causing the USD0++ haircut today, however, is Usual’s announcement of an alternative USD0++-to-USD0 exit option. The feature was noted in a blog post published yesterday. Based on updated docs , the new exit option would allow users to redeem USD0++ to USD0 at a manually set floor price of 0.87 USD0 per USD0++, while retaining rewards in USUAL emissions (unlike the original 1:1 exit option). Why $0.87? Because it’s the discounted rate at fair value. As Treehouse Finance’s @mytwogweis explains: If you expect 4% annually over four years, the fair value of USD0++ today should be around $0.855. This means you’d buy it at $0.855, hold it for four years, and redeem it at $1 for a risk-free 4% return. To put it simply, the new exit option more accurately reflects USD0++ for what it is: a long-term bond. The problem is that Usual’s go-to-market strategy had already been built on different premises. Pendle PT-USD0++ farmers who entered into fixed yield trades are now suddenly finding they’ve “overpaid” for a bond at face value (on maturity, 1 PT USD0++ is equal to 1 USD0++). The USD0++ Pendle pool (with a maturity date of Jan. 30, 2025), for instance, is seeing a dump. Source: Pendle To make matters worse, vault curators on Morpho lending markets have hardcoded the prices in USD0++:USDC markets at a 1:1 parity, rather than basing assets on a free floating market rate. The result: Risk curator Gauntlet and other LPs promptly reallocated vault supply liquidity in USD0++ out of Morpho vaults above the current market rate of $0.91 ahead of the news, prompting public rumors of insider trading. Loading Tweet.. In an email to Blockworks, Tarun Chitra, founder and CEO of Gauntlet, said of the firm’s activity: “We were not privy to any advance notice, however, as the timestamp of these transactions show (the Usual team updated their docs on redemption before this). We were focused on making sure our users weren’t exposed, and we automatically rebalance out of markets when either risk or concentration limits are breached.” MEV Capital has released a public statement denying it received any insider information from Usual, although it does not say who the firm received the information from. USUAL, the protocol’s native token, has unwound -18.7% over the last 24 hours, as of 11:45 am ET. Macauley Peterson contributed reporting. Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter . Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter . Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more. The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus. Tags 0xResearch Newsletter liquidity stablecoins staking
A user lost $60,013 in USUAL by copying the wrong CEX deposit address
ScamSniffer monitoring shows that two hours ago, a victim lost 60,013 US dollars worth of USUAL due to copying the wrong CEX deposit address from a "contaminated" transfer record.
Is USD0++ the next UST? Should USUAL holders panic?
Author: A Ray's New World, BlockBeats 2024 has become a significant year for stablecoin projects, with an increasing number of innovative new stablecoin projects emerging in the market. In just the second half of last year, at least 23 stablecoin projects secured substantial funding ranging from 2 million to 45 million. Besides Ethena, which surpassed DAI's market share with USDe, Usual has emerged as another eye-catching stablecoin project. Not only does it have the backing of French MP Pierre Person's government background, but Usual also launched on Binance at the end of 2024, with its market performance being widely recognized. However, Usual, which was once the darling of the market, has seen its token Usual drop by over 30% within a week. This morning, its token USD0++ also suddenly depegged to around $0.946, with one USD0++ token only redeemable for about $0.94. Currently, the USD0++ proportion in the USD0/USD0++ pool on Curve has tilted to 90.75%. USD0++ depegged, image source: Curve What exactly happened to Usual, and why did USD0++ suddenly experience a flash crash? Panic Run Triggered by an Announcement The depegging of USD0++ can be traced back to a notice released by Usual's official team on the morning of January 10. In the announcement, Usual changed the redemption conditions for USD0++, shifting from the original 1:1 redemption to a new dual-exit method. One method is a conditional exit, where users can still redeem USD0++ at a 1:1 ratio, but they need to burn part of their earnings during the exit. The other method is an unconditional exit, but unlike the previous guaranteed 1:1, the official minimum exit ratio is set at 0.87:1, which will gradually re-peg to $1 over time. Usual announcement for two exit methods, image source: Usual official website Usual's announcement quickly spread within the Usual community. As the new redemption rules for USD0++ took effect, panic began to spread from large whale investors to retail investors. In this "leopard chasing a person" game, users who ran first always suffered less loss than those who were a step slower. After the announcement today, amidst the panic and the flight of large holders, retail investors also began to cut their losses and flee. The outflow of USD0 not only accelerated but also "smashed through" the USD0/USD0++ pool on Curve. With a large amount of USD0++ being redeemed, the proportion of USD0 dropped to an astonishing 8.18%. Image source: Curve Let's rewind the timeline to when Usual launched on Binance. Initially, the redemption mechanism set by Usual last year allowed for a 1:1 redemption. Unlike Ethena, which leans more towards a B2B positioning, Usual's more consumer-oriented product attracted many large holders. With Usual's official 1:1 full redemption guarantee, many large holders not only took large positions but also continuously increased their leverage and capital efficiency through circular lending. This essentially provided all users with a form of risk-free yield. Such capital management was feasible as long as Usual's official rules remained unchanged, allowing large holders to gain USUAL mining rewards without incurring excessive opportunity costs. At the same time, the price of USUAL continued to rise, leading to a surge in the apparent APY, which attracted more users to stake, thus creating a positive feedback loop under Usual's price rally. Higher prices attracted excessive TVL, and more TVL further pushed up prices, creating a cycle. Usual's tight control over mining tokens and the apparent APY attracting TVL was almost an open strategy. Retail investors could also benefit from Usual's "left foot stepping on the right foot" model, following large holders to reap rewards. Therefore, Usual's positive feedback loop quickly began to turn. Usual's extremely high APY, image source: Usual official website The key issue with this mechanism is the exit problem. For long-term holders, USUAL's issuance is linked to the overall protocol's revenue; the higher the TVL, the less USUAL will be issued, creating a deflationary mechanism. By reducing the supply of USUAL on the supply side, a certain degree of scarcity is artificially created. The team also designed the mechanism for USUAL, where staking USUAL tokens would yield USUALx, allowing these holders to receive 10% of the newly minted USUAL daily, rewarding early participants in the ecosystem. Additionally, when redeeming USD0++ early, 33% of the burned USUAL will be allocated to USUALx holders, creating an additional source of income. So for short-term holders, they face a choice: either sell USUAL and run away or continue holding USUAL and stake for more rewards. The question arises: is it better to "use a little to push a lot" or "pull the plug and run"? Under the premise of continuously rising prices, running away would only yield current USUAL rewards, while choosing to stand on the side of time would yield "staking rewards + USUAL token appreciation + additional income." The prosperity of Usual is constantly being pulled between the economic games of short-term and long-term holders. However, all gifts in fate come with a price tag. Usual's official team hinted long ago that USD0++ would incur an exit fee. Almost all participants in Usual tacitly understood this, all playing a game of who would be the last one standing before the building collapses. Why the "Mysterious" 0.87? So, why did the official announcement today set the unconditional exit ratio at 0.87? How did the official consider this precise ratio of 0.87? Profit Burning Theory The 0.87:1 ratio set in the official announcement triggered a profit evaluation among large holders. Since the previous 1:1 guaranteed redemption strategy has failed, losing the official guarantee, large holders now face the problem of how to choose the best option among the "short ones." If they opt for conditional redemption, investors need to return part of their subsequent profits to the project, but the details of this profit withdrawal have not been disclosed by the official. Conversely, if they accept the unconditional redemption method, the worst-case scenario guarantees only 0.87, with the remaining 0.13 becoming the core of the game. When either of the two exit methods offers higher returns, funds will naturally vote for the most profitable exit method, but a well-designed mechanism should allow users the flexibility to choose rather than being "one-sided." Therefore, the existence of the 0.13 space likely indicates that the official has yet to disclose the portion of profits that need to be burned, allowing users to make a choice between the two methods. From the user's perspective, if they have to pay a guaranteed cost of 0.13 later, it might be better to sell at the current depegged price (currently around 0.94). USD0++ would then shed its previous packaging and return to its economic essence as a bond. The 0.13 represents the discounted portion, while 0.87 reflects its intrinsic value. Liquidation Bottom Line Theory Previously, Usual's mechanism of providing a 1:1 peg for USD0++ allowed many large holders to safely take positions and obtain almost risk-free returns, further increasing leverage and capital efficiency through lending protocols like Morpho. Typically, these users engaging in circular lending would collateralize their USD0++, borrow a certain amount of USDC, then exchange this USDC for USD0++, and subsequently initiate a new round of circular lending. These users, keen on circular lending, provided Usual with considerable TVL, continuously elevating the system, but behind the TVL "perpetual motion machine," there also exists a liquidation line. In the Morpho protocol, the liquidation line for USD0 is determined by the Loan-to-Value ratio (LLTV). LLTV is a fixed ratio, and when a user's Loan-to-Value (LTV) exceeds LLTV, their position faces liquidation risk. Currently, Morpho's liquidation line is set at 86%, which is just a step away from the 0.87 bottom line in the official unconditional exit. In Morpho, the liquidation line for USD0++ is 86%, image source: Morpho The 0.87 in Usual's official announcement is just above Morpho's 0.86 liquidation line. It can be seen as a final barrier set by the official to prevent systemic liquidation risks. Although the 0.87 setting provides a final bottom line, it maintains a project's dignity towards its users. However, this is also the reason many large holders are stepping back to observe. The 13-point space allows for free fluctuations, and many interpret it as meaning that as long as the final chain liquidation does not occur, it will ultimately be allowed to "free fall." What Are the Short- and Long-Term Impacts After Depegging? So how will the situation unfold after USD0++ depegs? Currently, the panic sentiment surrounding USD0++ in the market has not subsided; the vast majority of people are adopting a cautious approach, holding their positions, and waiting to see. The market's reasonable value for USD0++ stabilizes around 0.94, a consensus based on the temporary announcement. The official has yet to disclose detailed information on how the "unconditional exit" will burn and how much profit will be deducted, with further details expected to be announced next week. In an extreme scenario, if next week the official does not burn the anticipated 13 points but instead burns 0.5% of USUAL, then USD0++ could quickly re-peg to around 0.995. The re-pegging of USD0++ will depend on the burning details announced by Usual next week. Regardless of how the final mechanism details are determined, it will benefit holders of the tokens UsualX and USUAL. By designing the new exit method, Usual's official team has reduced the yield of USD0++, and although the market's exit method has been overly intense, it will lead to a decrease in USUAL/USD0++ TVL, thus driving up the price of the USUAL token. Once burning begins, USUAL will be consumed, leading to further token value capture, and the price will become more robust. From Usual's mechanism design, it is evident that USUAL is a key component in the design of the protocol's feedback loop. Since reaching a high of 1.6, USUAL has dropped about 58%, and it needs another surge to get the feedback loop turning again. USUAL token price plummeted by 58%, image source: tradingview Ironically, while a large number of arbitrageurs contributed significant TVL to Usual through Morpho's circular lending, the official announcement of the 0.87 bottom line seems more like a warning to those engaged in circular lending at the 0.86 liquidation line. Now, Usual's official team has removed the previous 1:1 rigid redemption "privilege," correcting the mechanism that "should not have existed." As for the re-pegging situation of USD0++, the entire market is waiting for Usual's official announcement next week, and Rhythm Blockbeats will continue to follow up.
Usual Protocol Faces Criticism After USD0++ Depegs
USD0++ depegged after new rules caused panic and losses. Usual Protocol introduced fixes like revenue sharing and 1:1 unstaking. Protocol’s token, USUAL, dropped in value by 18.7%. Criticism of Usual Protocol DeFi stablecoin issuance protocol was due to a loss of parity in the staked stablecoin, USD0++. This began depegging on January 9 at a coin level reaching a value of $0.89, while by later stages of recovery. It stood at $0.92 and created fear for both users and cryptospheres. USD0++ is not an ordinary stablecoin but rather a liquid staking derivative of USD0, somewhat working like stETH when with ETH in Lido Finance. Although USD0 is fully pegged to the US dollar and, therefore, backed by US Treasury bills. USD0++ works more like a bond since users stake USD0 to receive rewards in terms of T-bill yields and the protocol’s native token. USUAL, but the money is locked for four years. Changes Introduced by Usual Protocol The issue began when Usual Protocol altered the redemption mechanism of USD0++. Previous to this, users could redeem USD0++ at a 1:1 ratio with USD0. This update introduced an alternative redemption mechanism for USD0++ set at a floor price of $0.87. Which is valuing the long-term bond as a discount. This shocked numerous users, causing large liquidations and shifts in liquidity on Curve Finance and Pendle. To counter this backlash, Usual Protocol has announced several measures. It will activate a “revenue switch” on January 13, sharing earnings from real-world assets and operations with the community. Current conditions will raise returns over 50% annually, generating about $5 million in monthly revenue. These earnings are to be distributed weekly. The protocol will also introduce a “1:1 Early Unstaking” feature that enables users to claim USD0++ at the $1 peg but will penalize them by asking for surrendering their rewards. The update has been countered by key individuals in the crypto space. Stani Kulechov, Aave founder, criticized the update stating that it exposes the risk of hardcoded price feeds. Michael Egorov, Curve Finance’s founder, was expecting the discount on USD0++ because it is bond-like. But at the same time, he conceded that the sudden change had caught many unprepared. The governance process also came under criticism, as governance is part of the protocol structure, and the owners of USD0++ were not given a say in the vote. Impact on USUAL Token USUAL, the native token of the protocol, was not spared from the controversy, and in the last 24 hours, it lost 18.7% of its value. Usual Protocol now faces rebuilding trust and stabilizing its ecosystem. How the team addresses the concerns will define its future in the competitive DeFi space. Highlighted Crypto News Today 0G Foundation Raises $30.6M in Record-Breaking Decentralized AI Node Sale
The update of the Usual Money agreement has caused concern in the community, with USD0++ once falling to 0.915 dollars
According to The Block, an update to the Usual Money protocol caused its collateralized stablecoin USD0++ to fall 8.5% from $1 on decentralized exchanges, down to $0.915. The protocol introduced a dual-path exit mechanism that allows users to redeem USD0++ at a floor price of $0.87 USD0 or choose to forfeit some profits for a 1:1 redemption, but changes made without prior notice have drawn criticism from the community. USD0++ was originally a zero-interest bond token locked for four years, typically valued at $0.855 in the market but previously could be redeemed 1:1 with USD0. After the update, many holders sold off their USD0++, causing severe imbalance in the Curve pool and fluctuating prices up to 92%. Community members criticized the team for not announcing beforehand and locking up large amounts of funds, but others believe this move helps long-term stability.
Pyth Network announced that it has supported USD0++/USD price feed service
Network has announced support for USD0++/USD price feeding services, and is currently the only oracle project that supports USD0++ price feeding services. USD0++ is a liquid collateral token for USD0, which is a stablecoin protocol issued by the decentralized stablecoin protocol Usual. As an oracle solution, Pyth Network supports 78+ blockchains and provides more than 500 real-time price data feeds. Previously, Pyth also launched an upgraded oracle security pledge Oracle Integrity Staking (OIS), aimed at further improving the reliability of data sources and the security of the DeFi ecosystem, providing strong support for dApp developers.
VCs Bullish on Crypto: Funding Expected to Hit $18B in Post-Bear Rebound
The crypto and blockchain sector demonstrated remarkable resilience in 2024, with venture capital funding reaching $13.6 billion, marking a substantial recovery from $10.1 billion in 2023, according to a comprehensive DeFi Report. While this represents a positive trajectory, the industry continues to operate below its historic peak of $32.4 billion achieved during the crypto bull run of 2021. Industry analysts from Galaxy Research and PitchBook project an even more robust funding environment for 2025, with expectations of surpassing $18 billion in venture capital investments. This optimistic outlook is underpinned by several macroeconomic factors, including declining interest rates, enhanced regulatory clarity, and a notable resurgence of interest from generalist investors who had previously stepped back from the crypto sector. The year 2024 witnessed several significant funding rounds that highlighted continued institutional confidence in blockchain technology. Monad Labs emerged as a standout recipient, securing an impressive $225 million for its layer-1 smart contract network development. In a similar vein, Berachain demonstrated the market's appetite for innovative infrastructure solutions by raising $100 million for its modular blockchain platform. Institutional involvement reached new heights as traditional financial giants made strategic moves into the crypto space. BlackRock's $47 million investment in tokenization platform Securitize signaled growing mainstream acceptance of digital asset infrastructure. The Bitcoin ecosystem also saw substantial development, with staking protocol Babylon attracting $70 million in funding. The stablecoin sector showed particular promise, as evidenced by French startup Usual's successful $10 million raise from industry leaders Binance Labs and Kraken Ventures. The company's flagship product, Usual USD, backed by real-world assets, demonstrated remarkable traction, accumulating over $1.7 billion in total value locked (TVL) by year's end. Generalist Investors To Usher-In the $18B VC Funding in 2025 Robert Le, a leading analyst at PitchBook, offers an optimistic perspective on the sector's future. "We're going to see $18 billion or more in venture capital dollars invested into crypto," Le stated in a CNBC interview, highlighting the convergence of multiple positive factors. He particularly emphasized the crucial role of generalist investors returning to the space and the substantial dry powder held by crypto-native funds. The regulatory landscape remains a critical factor in shaping investment sentiment. Le anticipates a more favorable regulatory environment under the incoming U.S. administration, with potential progress on stablecoin legislation and crypto-specific regulatory frameworks. Even without new regulations, the stability of the current regulatory environment could provide sufficient confidence for increased investment activity. Galaxy Research analysts Alex Thorn and Gabe Parker provide additional context, noting that "crypto VC fundraising has historically lagged broader crypto market trends." They suggest 2025 could represent a significant "catch-up" period, potentially catalyzing a new wave of innovation and growth in the sector. The evolution of investment focus is particularly noteworthy, with funding expected to shift from infrastructure projects toward decentralized applications (DApps) and real-world use cases. This strategic pivot mirrors the development trajectory of traditional tech infrastructure, with Le drawing parallels to Amazon Web Services' role in enabling innovative consumer applications. Recent funding rounds reflect this trend, with companies like Avalon Labs securing $10 million to scale its Bitcoin-backed DeFi ecosystem, serving over 200,000 users and supporting more than 20,000 Bitcoin. Similarly, Accountable's $2.3 million raise for privacy-focused data-sharing technology demonstrates growing interest in practical applications of blockchain technology. The combination of institutional involvement, renewed interest from generalist investors, and the strategic shift toward application-focused investments positions the crypto sector for potentially significant growth in 2025. With projected funding of $18 billion, the industry appears poised for a transformative year that could establish new benchmarks for blockchain innovation and adoption.
DeFi descends into chaos as $1.6bn protocol changes rules of bonds backing its stablecoin
Usual Labs, the firm behind stablecoin protocol Usual, changed the code for the bonds backing its USD0 stablecoin Thursday, plunging several apps that integrated the token into chaos. Usual’s code change cut the fixed price of the staked, bond-like version of USD0, called USD0++, from $0.995 to $0.87. While the protocol’s team say the change was previously announced and had been planned since October, the move blindsided investors, users, and DeFi developers who say they were not prepared for the change. On the Usual Discord server, a messaging app popular in crypto, investors criticised the communication surrounding the change. “The fact that there is chaos in the market surely lets you know that you guys have messed up here,” one user said. “How are you guys not taking any responsibility?” Usual Labs did not immediately respond to DL News’ requests for comment. Many DeFi apps treated USD0 and its staked version as equal in value. They were designed to allow the two assets to be swapped one-to-one. That’s no longer the case. Now, those managing the DeFi integrations are scrambling to adapt. Users of Pendle, another protocol which lets users split assets into tokens that represent their principal and yield-bearing parts, may face losses after the value of USD0++ principal tokens declined in the aftermath of the change. Many investors had staked the bond-like USD0++ on the understanding that it could be redeemed at a one-to-one ratio for USD0, which is pegged to the dollar. However, with the new change, USD0++ can only be redeemed for $0.87, unless holders wait until 2028 when the bond token matures. How does USD0 work? USD0 is a token pegged to the dollar and backed one-to-one by real-world assets, such as short-dated US treasury bills. Holders can stake USD0, converting it to USD0++, which is locked for four years and receives yield paid out in the protocol’s native token, USUAL. Before Thursday’s changes, documentation on the Usual site said that USD0++ holders would be able to exchange their tokens for USD0 at below a one-to-one ratio. After the changes, Usual updated its documentation to include the $0.87 floor on such redemptions. A previous version of Usual’s documentation from before the change did not say the floor for USD0++ would be hardcoded to $0.87 in the future. Conditional exit There may be hope for USD0++ holders who weren’t aware of the change. On the Usual Discord, community lead Noé Giglio confirmed to investors that a conditional exit from USD0++ to the dollar-pegged USD0 at a one-to-one ratio would go live early next week. The redemptions, however, require users to forfeit a portion of accrued yields on their USD0++ holdings. It’s not clear if those who choose to keep holding their USD0++ bond tokens will ever turn a profit, even when they mature. “This is a very tricky situation, as if the USD0++ will be traded as a zero coupon bond, it means that the position will be under water — basically bad debt in disguise — forever,” Stani Kulechov, founder of top DeFi lending protocol Aave, said on Telegram. “Even after four years of maturity, the borrowers already might suffer so much borrowing costs that they just dump their positions as unprofitable and never repay,” he said. Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at [email protected].
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