Explanation of the depeg incident, Usual Protocol identifies the cause as a whale in the secondary market.
Usual Protocol's USD0 was depegged due to a whale "dumping"
Recently, the stablecoin USD0 of Usual Protocol has slipped out of the 1:1 peg to the collateral asset, also known as "depeg". Specifically, USD0 has dropped to $0.9972. However, the incident only lasted for a short time and quickly recovered to the $1 threshold.
Latest 24-hour price fluctuation of USD0, screenshot from CoinGecko at 10:30 AM on 01/02/2025
According to confirmation from Usual Protocol, this incident originated from the actions of a whale in the market. Although it is the first time they have encountered this situation, Usual Protocol affirms that their system has not encountered any serious problems. The incident only occurred when a transaction larger than the entire Total Value Locked (TVL) of GHO took place in a split second.
This morning (07:00 AM UTC), the Usual protocol experienced a massive USD0 sell-off triggered by a single whale's trade on the secondary market, which raised doubts about the USD0 peg. USD0 briefly dipped to $0.99 before re-pegging to $1 within a few seconds, initially with some…
— Usual (@usualmoney) December 31, 2024
This incident has led many to draw comparisons to the past tragedy of UST. However, USD0 has a more diversified collateral structure and is backed by highly liquid assets, helping to mitigate risks compared to UST.
Although the depeg incident was not too serious, it still caused concern in the community, especially when the project has implemented strict control measures, such as only allowing redemption for a selected number of projects. The project also pledged to continue improving the process to enhance efficiency and protect the stability of the stablecoin in the future.
After the incident, the USUAL price dropped slightly to $0.92, not as worrying as many had feared.
Latest 24-hour price fluctuation of USUAL, screenshot from CoinGecko at 10:30 AM on 01/02/2025
Usual Protocol is a Decentralized Stablecoin protocol that is growing quite steadily. Although the USUAL token was only launched on 12/20, this protocol has attracted a lot of attention, with the protocol's TVL currently around $1.64 billion. The USD0 stablecoin has also seen exceptional growth, with the supply increasing by 5.4% in the past week.
TVL fluctuation of Usual Protocol. Source: DefiLIama (01/02/2025)
Usual Protocol has successfully raised $18.5 million from major investment funds such as Binance Labs, Kraken Ventures, and Coinbase Ventures. In the most recent Series A round, the protocol has raised $10 million.
Compiled by Coin68
