The price of the currency ranges from 0.2 to 1.3. What are the advantages of interpreting Depth as Usual?

From November 11th to 19th, Usual’s governance token $USUAL achieved an astonishing rise from $0.2 to $1.3, with a rise of over 500% in just nine days.

Tether and Circle earned over $10 billion and reached a valuation of over $200 billion in 2023, but this wealth has nothing to do with the users - their model is to privatize the profits of user deposits while transferring the risks to society. Such a mechanism, similar to the problems in the traditional banking industry, completely deviates from the original intention of decentralized finance.

Usual provides a new stable coin concept: reallocating value and power, allowing users to truly become the masters of the system. Through governance Token, Usual returns all the profits and decision-making power generated by the protocol to the community, allowing every participant to share the dividends of the ecosystem rise.

In a market dominated by centralized giants, Usual is trying to break the status quo and create a more fair and transparent financial system for users through DeFi.

What is Usual?

USUALLY is a fiat stablecoin issuer that is decentralized rather than highly centralized like Tether and Circle. The recently popular $USUAL is the token they issued for the redistribution of ownership and governance.

USUALLY first appeared in people’s sight at the beginning of this year. In April, it completed a $7 million financing led by IOSG Ventures; in June, it released its own protocol, Usual Protocol; in July, Usual went live on the mainnet; on November 19th, $USUALToken was officially launched, and on December 23rd, Usual completed a $10 million Series A financing.

Why choose decentralization?

Now, the stablecoin market has exceeded 100 billion US dollars in size, but its value is mainly concentrated in the hands of centralized giants such as Tether and Circle, making it almost impossible for ordinary users to benefit from it. This centralized model not only deprives users of their profit rights, but also limits the development of stablecoins to the control of a few institutions.

A new solution has been proposed for this market pain point: empowering users through decentralization, making them core participants in protocol infrastructure, funding, and governance, thus breaking the monopoly pattern of traditional stablecoins.

Usual’s governance token $USUAL realizes 100% value and control redistribution, ensuring that community users have dominance. By distributing governance tokens, the protocol rewards users and third parties who contribute value, optimizing financial incentives and giving ecosystem participants more power and voice. Compared to traditional models, Usual’s decentralized design rewards early contributors, aligns the interests of all stakeholders, and makes the protocol more dynamic and inclusive.

At present, stablecoin issuers in the market can be roughly divided into three categories:

• Traditional Model: For example, Tether, which distributes all income to its shareholders. Users can only obtain a DeFi-compatible stablecoin, but cannot enjoy the benefits or dividends of the protocol rise.
• Yield Stablecoin: Issued by institutions such as Ondo or Mountain, it allows users to share underlying income through permission mechanisms. However, users can only receive income and cannot benefit from the rise of the protocol. For example, whether the TVL of USDM is 100 million US dollars or 100 billion US dollars, the user’s income remains fixed at 5%.
• Usual Mode: Usual combines the profits with rise. By redistributing value through the $USUAL governance Token, users not only gain stablecoin profits but also have ownership of the protocol and rise potential.

The decentralization concept of Usual has injected fresh ideas into the stablecoin market, making it unique in the stablecoin market.

USUAL’s three core products

Usual’s core products include: USD0, USD0++, and USUAL governance Token. Together, these three form the core ecosystem of Usual.

USD0

USD0 is the first liquidity deposit Token (LDT) launched by Usual Protocol. It is backed 1:1 by real-world assets (RWA) such as US Treasury bonds, ensuring its high stability and security. USD0 is not only a stablecoin pegged to the US dollar, but also a permissionless, composable asset that can be seamlessly integrated into the DeFi ecosystem. Through USD0, Usual enables users to conduct payments, trades, and collateral operations more securely, while ensuring security unrelated to traditional bank deposits.

USD0++

USD0++ is a staking version of USD0, which can also be seen as a liquid staking Token (LST). Users can stake USD0++ as a 4-year bond to receive $USUAL Token as yield rewards. USD0++ maintains the stability of USD0 and allows users to receive protocol rewards through a decentralized distribution mechanism. In addition, USD0++ also has high liquidity and composability, and can be widely used in DeFi protocols, providing holders with higher potential returns.

USUAL governance Token

USUAL Governance Token is the core of the entire Usual Protocol, which gives holders decision-making and governance rights in the protocol. Through a decentralized governance mechanism, USUAL Token allows users to not only participate in the management of the protocol, but also to benefit from the growth and revenue of the protocol. 90% of USUAL Tokens will be allocated to the community, with only 10% reserved for the protocol team and investors, ensuring the community’s dominant position and encouraging more users to participate in the construction and development of the protocol.

Through these three core products, Usual not only provides stability and returns, but also ensures user control and value distribution in the protocol through decentralized mechanisms.

USUALToken Economics

Many governance Token designs in the market now have some problems. Most Token models are basically copied and fail to effectively balance the interests of short-term speculators and long-term investors, resulting in Token prices being easily influenced by speculation, leading to selling pressure. At the same time, there is not much close connection between the value, governance, and income potential of these Tokens, relying more on market hype to push up prices, while ignoring creating actual value for users. Founders and teams usually hold a large number of Tokens, while the holding value of ordinary users is constantly eroded by inflation, ultimately leading to Token depreciation.

Unlike these traditional Tokens, Usual ensures the long-term integration of interests of users, contributors, and investors through a unique Token economic model, thereby achieving sustainable value rise and practical utility. This design avoids short-term speculation, focuses on stability and long-term value creation, and truly benefits every participant.

USUAL Token is the core of the Usual Protocol ecosystem, mainly used for governance, while also providing economic benefits for holders. The value of the token comes from its representation of economic rights and the actual benefits brought by stablecoin collateral. In short, when the protocol generates income, the value of USUAL will rise, allowing holders to share in the growth of the protocol.

In terms of Token distribution, Usual allocates 90% of USUAL Tokens to users who contribute value and revenue to the protocol through the Total Value Locked (TVL) of USD0, in order to avoid excessive dilution. The combined holdings of the team, investors, advisors, etc. will not exceed 10% of the total supply of Tokens. This distribution method ensures that the interests of users are not diluted due to excessive issuance.

The issuance mechanism of USUAL is directly linked to the cash flow generated by stablecoin collateral. Whenever a user pledges USD0, the protocol will mint new USUAL Tokens. As the protocol’s income increases, the token supply will also increase. This design ensures that the issuance speed of the token will not exceed the economic rise speed of the protocol, avoiding rapid inflation.

The Token issuance of Usual follows a deflationary model, with the issuance rate carefully calibrated to stay below the pace of protocol income rise. This means that as the protocol develops, the USUAL Token will become increasingly scarce, ensuring long-term stability of the Token’s value.

In addition, USUAL holders will also participate in the decision-making of the protocol’s financial management, determining how to use the protocol’s revenue, such as through the destruction of Tokens or income distribution, etc. In this way, holders can not only govern the protocol, but also influence the protocol’s financial strategy and long-term development.

Finally, USUAL holders can also earn rewards by staking Token. When you stake USUAL Token, they will be transformed into USUAL+, and users holding USUAL+ can receive up to 10% of newly minted USUAL Tokens, with the specific ratio determined by the issuance rules. This not only provides additional income, but also incentivizes users to participate in the protocol’s construction and ecological development in the long term.

Participating in the USUAL project is profitable and risk-free?

The emergence of USUAL reminds people of The DAO and Luna, which were also highly regarded projects throughout the cryptocurrency industry, but ultimately collapsed in an instant due to smart contract vulnerabilities or token economics. Although USUAL looks very promising, with innovative token economics and strong security mechanisms, blockchain projects themselves still carry certain risks, and no matter how carefully designed, it is impossible to completely eliminate the possibility of vulnerabilities and attacks.

Security Audit of USUAL

USUAL has undergone 5 security audits, which were conducted by Cantina. The audit work mainly includes:

Permission to start smart contract audit, start smart contract audit without permission, L2Token contract, OFT MintAndBurnAdapter and L1 OFT Adapter, USD0++ and DAO collateral contract, SwapperEngine and USUALToken contract, USUAL distribution and airdrop contract, Blackthorne audit, etc.

Although the security audit has been done thoroughly, the way of storing private keys has not been disclosed. After all, there are precedents like DEXX and Radiant, so it does not necessarily mean that USUAL is safe.

Does USUAL security monitoring have any defects?

The monitoring framework provided by the official USUAL documentation is already very comprehensive, but there are still some minor issues:

Limitations of monitoring coverage:

The current monitoring framework mainly focuses on monitoring key operations within the protocol, but there may not be sufficient real-time monitoring for external interfaces, third-party integrations, or interactions with other chains (such as cross-chain operations). If there are vulnerabilities or attackers exploit the interaction between the protocol and external systems, existing monitoring may not be able to detect the problem in a timely manner.

Threshold Setting:

In the threshold alert system, abnormal trading volume, significant token fluctuations, or price fluctuations may trigger an alert. However, market volatility and certain special events, such as large-scale transactions or market adjustments, may be mistakenly identified as abnormal behavior. If the threshold settings are not intelligent enough or do not adapt to market changes, there may be excessive alerts or missed alerts, resulting in a failure to respond promptly or causing misinformation.

Potential Risks of Multisig:

Just like the example of the theft of Radiant, although the activities of the multi-signature wallet are monitored in real time, there may be risks of improper management of the multi-signature itself. If the participating signatories make mistakes, are compromised, or behave maliciously, the monitoring system may not be able to detect abnormal authorization operations in advance.

Finally

The USUAL protocol is doing a great job in innovation, adopting a token issuance model linked to actual revenue to ensure long-term value rise. In addition, its security mechanism is also very robust, with automatic ‘circuit breakers’ that can immediately suspend operations when risks are detected to protect user assets. However, there are also some potential risks, such as the automatic defense mechanism may misjudge or miss reporting, and the security of multi-signature and external interfaces also needs continuous attention.

Overall, the design of USUAL provides a promising solution to address the speculation problem and enhance security in blockchain protocols.

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