Background
Usual Protocol is a multi-chain DeFi protocol that aggregates the tokenized RWA from entities like BlackRock, Ondo, Mountain Protocol, M0 or Hashnote. It transforms these RWAs (mainly on-chain US Treasury Bills) into a composable stablecoin ($USD0).
USD0 is currently the 7th largest stablecoin by market cap at $1.2Bn, down from its peak at $1.8Bn a couple weeks ago. It is a new stablecoin but already proving itself to be a market leader.
Let’s explore how it works.
Tokens
The system works thanks to the integration of three tokens:
- $USD0
- A stablecoin with 1:1 peg to USD
- Backed by RWAs like U.S. Treasury Bills
- Designed to achieve stability, transparency, and independence from the traditional banking system
- Used for payments, trading, and use as collateral
- USD0++
- Staking token that acts as a vehicle for the distribution of yield
- Offers holders an enhanced T-Bill equivalent, or a savings account for RWAs
- Rewards are paid out in $USUAL tokens
- $USUAL token
- Governance token
- Backed by real yield and revenue
- Grants ownership rights over the protocol’s actual revenues, future revenues, and infrastructure
- $USUAL needs to be staked to get $USUALx which is the token that actually unlocks governance rights (collateral management and liquidity strategies) and compounding rewards
Flow
- Users deposit USDC to the protocol
- USD0 stablecoin is minted, users can redeem it 1:1 for USDC via secondary and primary markets
- Users can stake USD0 to unlock USD0++, which locks the funds temporarily and earns yield
- USD0++ holders benefit from higher yields via $USUAL rewards
- When unstaking, USD0++ is burned and the user receives USD0
- The protocol aggregates all liquidity and invests it in on-chain T Bills
- Stakers are granted $USUAL distribution by participating in the ecosystem (staking, providing liquidity)
- $USUAL has deflationary issuance, meaning that it is only issued whenever the protocol has 100% certainty of future cash flows
In this way, Usual aims to ensure that the inflation rate is always lower than the increase in revenue and treasury holdingsUsual Treasury
- 100% of the protocol’s revenue goes to the treasury
- The Treasury is controlled through governance
- Governance participants control the, its investments, and future re-distributions
- 90% of the revenue is distributed to the stakeholders who support operations (stakers, liquidity providers, and ecosystem members) and the other 10% is distributed to $USUAL token holders
Usual Treasury
- 100% of the protocol’s revenue goes to the treasury
- The Treasury is controlled through governance
- Governance participants control the, its investments, and future re-distributions
- 90% of the revenue is distributed to the stakeholders who support operations (stakers, liquidity providers, and ecosystem members) and the other 10% is distributed to $USUAL token holders
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