Usual opens a new paradigm of stablecoin income: 90% goes to the community, a truly user-led stablecoin protocol

Author: Ignas | Decentralized Finance

Compilation: DeepTech TechFlow

The stablecoin market has surpassed 100 billion USD, but most of its value is controlled by centralized giants like Tether and Circle, and ordinary users cannot benefit from it.

In this market cycle, we have seen the rise of Ethena, and now Usual has also joined the competition.

Usual is a decentralized, transparent and community-driven stablecoin protocol.

Usual launched USD0, which is a stablecoin backed by fiat currency and collateralized by ultra-short-term US treasuries.

Recently, they partnered with Ethena to allow users to use USDtb as collateral for USD0.

In addition, the protocol also provides a 1:1 exchange mechanism between USDtb, USD0, and sUSDe.

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Usual has also launched USD0++, a liquid staking token that allows users to earn yields by staking USD0.

Users can earn daily profits through USD0++, with profits in the form of $USUAL tokens or risk-free USD0.

The current annualized yield is as high as 80%.

$USUAL has brought new innovations in token economics:

It represents ownership of 100% of the protocol’s revenue.

Holders have governance rights over the treasury and protocol decisions.

Holders can also share in the future growth dividends of the protocol.

Unlike utility tokens with low circulation and high fully diluted valuation (FDV), Usual’s token economics focuses more on community distribution:

90% of $USUAL will be distributed to the community, including users, liquidity providers and contributors.

Only 10% is allocated to internal personnel (team and investors).

$USUAL holders will control the treasury and major protocol decisions.

The issuance mechanism of $USUAL is dynamic and directly tied to the actual revenue of the protocol.

Every day, new $USUAL is minted and distributed based on the income of the protocol.

As the total value locked (TVL) of USD0++ increases, the issuance speed of $USUAL will gradually slow down.

Although the official documentation claims that the token is not inflationary, in fact $USUAL is inflationary.

The solution is to stake $USUAL for USUALx, which can receive 10% of the protocol’s daily minting supply.

In the event of unstaking, a 10% penalty will be paid, half of which will be awarded to other USUALx stakers.

The current annualized yield is as high as 1737%.

The largest distribution of $USUAL occurred during the initial airdrop phase (which I completely missed).

Over time, the token issuance speed will gradually slow down, so early participants have an advantage, the key is to enter early and expect the growth of TVL.

The longer the time, the more pronounced the dilution effect of the token becomes.

The good news is that the collaboration with Ethena will help drive rapid TVL growth.

Disclaimer: I have not received any compensation for this article!

However, it is exciting to see innovative projects like Ethena and Usual challenging USDT and USDC. These traditional stablecoin giants have not shared profits with users, while new projects are changing this situation.

Now, we have two alternative choices worth paying attention to, which can bet on the further growth of the stablecoin market.

If I have any information wrong, please feel free to point it out!

I am still researching this protocol, and as usual, I am recording my understanding while learning!