Stablecoins are the cornerstone of the cryptocurrency world, providing a price-stable asset that facilitates transactions within the crypto ecosystem. However, the mainstream stablecoins in the current market are mostly dependent on centralized institutions, raising concerns about transparency and security. Usual is a recently launched decentralized stablecoin protocol that provides a new financial solution by backing the stablecoin with real-world assets (RWA). Usual's core products include USD0 and USD0++, which correspond to the stablecoin and an enhanced treasury bond product, respectively. The design of these products not only offers higher transparency and security but also provides users with the opportunity to grow with the protocol.
The Birth and Background of Usual
Usual was founded in 2022 and is an innovative protocol focused on integrating RWA and DeFi. The project has completed two rounds of financing, raising a total of $8.5 million, attracting support from renowned institutional investors such as Kraken Ventures and IOSG Ventures. Currently, Usual's platform has a total value locked (TVL) of $350 million, indicating that it has already gained initial market recognition in the DeFi and RWA space. Usual's vision is to break the boundaries between traditional finance and crypto finance, providing a more transparent, efficient, and fully decentralized stablecoin ecosystem for global users.
The Design and Advantages of USD0
USD0 is one of Usual's core products, a stablecoin pegged 1:1 to the US dollar, with its underlying assets fully supported by highly liquid assets such as short-term government bonds. Unlike the centralized stablecoins in the current market, the design of USD0 fully realizes transparency and decentralization.
The design of USD0 has several key advantages. First, it is completely isolated from the operations of traditional commercial banks, avoiding the impact of issues such as bank failures or insufficient reserve funds that affect centralized stablecoins. Secondly, the assets of USD0 are fully verifiable on-chain, and users can check the real-time status of the asset reserves at any time, addressing the market's concerns about the lack of transparency in centralized stablecoins. Furthermore, the permissionless nature of USD0 allows it to be widely used in the DeFi ecosystem, enhancing its liquidity and application scenarios.
The Innovation and Value of USD0++
Based on USD0, Usual has also launched an enhanced treasury bond product, USD0++. This is an upgraded product based on USD0, where users can obtain additional returns by locking up their USD0 for 4 years. The core design of USD0++ is to provide users with a choice that combines risk-free returns and protocol appreciation dividends.
The operating mechanism of USD0++ is highly innovative. The locked USD0 will be invested in short-term government bond products, and the returns will be distributed to the holders in the form of USD0 and the governance token USUAL. The locking period for USD0++ is 4 years, but users can freely trade USD0++ on the secondary market to achieve flexible exit. This design not only guarantees the liquidity of the investment but also allows users to operate flexibly based on market demand.
Another key feature of USUAL is its governance participation rights. Users holding USUAL can participate in the governance decisions of the protocol, including risk policy adjustments, asset allocation, and revenue strategies. This makes users stakeholders in the protocol, allowing them to share in the growth dividends of the protocol.
Challenges and Risks Faced by Usual
Although Usual offers an attractive product design, it still faces some challenges and risks. The first is liquidity risk. Currently, the total locked value of USD0++ is around $320 million, while the liquidity on decentralized trading platforms like Curve is only $29 million. When a large number of users choose to exit simultaneously, this may lead to insufficient market liquidity, even triggering the risk of USD0 de-pegging.
Secondly, there is market competition pressure. As more and more protocols enter the RWA track, such as competitors like Ethena, Usual needs to continuously improve the competitiveness of its products, especially in terms of yield rates and application scenarios, to attract more users and capital inflows.
In addition, regulatory risk is also an important factor that cannot be ignored. Although Usual's asset support is mainly in the form of compliant government bonds, the regulatory environment in the crypto market is constantly changing, and any policy changes could pose challenges to the protocol's operations.
Finally, Usual's DAO governance model, while reflecting the decentralized ideology, has always faced the common problem of low participation rates. If the governance structure is not well-designed, it may lead to low decision-making efficiency or uneven resource allocation.
Personal Perspective and Future Outlook
As a newly launched decentralized stablecoin protocol, Usual's design undoubtedly leads a new direction in terms of technology and ideology. By integrating RWA and decentralized governance, it provides users with a safer and more transparent choice. However, Usual's current yield rates are not yet fully disclosed, and the efficiency of its governance model remains to be verified. Before the project is fully mature, maintaining an observational stance is a more prudent choice.
In the future, if Usual can solve the liquidity risk and further expand the application scenarios of USD0 and USD0++, it may achieve a flywheel effect in the stablecoin market. At that time, the value of USD0 as a safe value storage tool and USUAL as a governance token will increase significantly.
Conclusion
Usual is a decentralized stablecoin project worth watching. By introducing real-world assets into the blockchain, it provides users with transparent, secure, and yield-stable financial products. Although there are still some challenges to overcome, its innovative design has injected new vitality into the stablecoin market. If you are interested in the future development of DeFi and stablecoins, Usual is undoubtedly one of the most worthy projects to research and follow in the current market.
