From November 11 to 19, Usual's governance token $USUAL achieved an astonishing increase from $0.2 to $1.3, growing over 500% in just nine days.

Tether and Circle earned over $10 billion in 2023, with valuations exceeding $200 billion, but this wealth is unrelated to users— their model privatizes the profits from user deposits while shifting the risks onto society. This mechanism mirrors the issues of traditional banking, completely deviating from the original intent of decentralized finance.

Usual offers a brand new stablecoin concept: redistributing value and power, allowing users to truly become the masters of the system. Through governance tokens, Usual returns all profits and decision-making power generated by the protocol back to the community, enabling every participant to share in the dividends of ecological growth.

In a market dominated by centralized giants, Usual seeks to break the status quo by creating a fairer and more transparent financial system for users through DeFi.

What is Usual?

USUALLY is a fiat-backed stablecoin issuer, and unlike Tether and Circle, it is a decentralized issuer rather than a highly centralized one. The recently popular $USUAL is their token issued for redistributing ownership and governance.

USUALLY first came into the public eye earlier this year, completing a $7 million financing round led by IOSG Ventures in April; in June, it launched its protocol, Usual Protocol; in July, Usual went live on the mainnet; on November 19, the $USUAL token officially launched, and on December 23, Usual completed a $10 million Series A financing.

Why Choose Decentralization?

Currently, the stablecoin market has surpassed $100 billion, but its value is mainly concentrated in centralized giants like Tether and Circle, with ordinary users hardly benefiting. This centralized model not only deprives users of their right to profits but also limits the development of stablecoins to the control of a few institutions.

Addressing this market pain point, Usual proposes a brand new solution: empowering users through decentralization, allowing them to become core participants in the protocol's infrastructure, funding, and governance, thereby breaking the monopoly of traditional stablecoins.

Usual's governance token $USUAL achieves 100% redistribution of value and control, ensuring that community users have the dominant power. The protocol distributes governance tokens to return profits to users and third parties who contribute value, optimizing the financial incentive mechanism and granting ecosystem participants more power and voice. Compared to traditional models, Usual's decentralized design rewards early contributors and coordinates the interests of all stakeholders, making the protocol more vibrant and inclusive.

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

• Traditional Model: For example, Tether, which allocates all income to its shareholders. Users can only obtain a stablecoin compatible with DeFi but cannot enjoy the profits or dividends from protocol growth.

• Yield-bearing Stablecoins: Issued by institutions like Ondo or Mountain, allowing users to share base yields through a permissioned mechanism. However, users can only receive yields without benefiting from protocol growth. For instance, regardless of whether USDM's TVL is $100 million or $10 billion, users' yields remain fixed at 5%.

• Usual Model: Usual combines profits and growth. By redistributing value through the $USUAL governance token, users not only gain stablecoin yields but also own the protocol and its growth potential.

  Usual's decentralized philosophy injects fresh ideas into the stablecoin market, making it stand out.

Three Core Products of USUAL

Usual's core products include: USD0, USD0++, and the 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 U.S. Treasury bonds, ensuring its high stability and security. USD0 is not only a stablecoin pegged to the U.S. dollar but also a permissionless, composable asset that can be seamlessly integrated into the DeFi ecosystem. Through USD0, Usual enables users to conduct payments, transactions, and collateral operations more securely while ensuring safety unrelated to traditional bank deposits.

USD0++

USD0++ is a staking version of USD0 and can also be viewed as a liquidity deposit token (LST). Users can stake USD0++ as a 4-year bond in exchange for $USUAL tokens as yield rewards. USD0++ maintains the stability of USD0 while allowing users to earn protocol yields through a decentralized profit distribution mechanism. Additionally, USD0++ has high liquidity and composability, making it widely applicable in DeFi protocols, providing holders with greater yield potential.

USUAL Governance Token

USUAL Governance Token is the core of the entire Usual Protocol, granting holders decision-making and governance rights within the protocol. The USUAL token employs a decentralized governance mechanism, allowing users not only to participate in protocol management but also to gain actual benefits from the protocol's growth and profits. 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 incentivizing more users to participate in the protocol's construction and development.

Through these three core products, Usual not only provides stability and yield but also ensures user control and value distribution within the protocol through a decentralized mechanism.

USUAL Token Economics

Many governance token designs in the market currently have some issues. Most token models are essentially copied, failing to effectively balance the interests of short-term speculators and long-term investors, resulting in token prices being easily influenced by speculation, leading to sell-off pressure. At the same time, there is little close connection between the value, governance, and income potential of these tokens, relying more on market hype to drive prices while neglecting to create actual value for users. Founders and teams often hold a large number of tokens, while ordinary users' holding values are continuously eroded by inflation, ultimately leading to token devaluation.

Unlike these traditional tokens, Usual ensures that the interests of users, contributors, and investors can be combined sustainably through a unique token economic model, achieving sustainable value growth and actual utility. This design avoids short-term speculation, focusing on stability and long-term value creation, truly allowing every participant to benefit.

The USUAL token is the core of the Usual Protocol ecosystem, primarily used for governance while also providing economic benefits to holders. The value of the token comes from the economic rights it represents and the actual yields generated by the stablecoin collateral. In simple terms, when the protocol generates income, the value of USUAL will grow, allowing holders to share in the protocol's growth.

In terms of token distribution, to avoid excessive dilution, Usual primarily allocates 90% of USUAL tokens to users who contribute value and income to the protocol based on the total value locked (TVL) of USD0. The total holdings of the team, investors, and advisors will not exceed 10% of the total supply. This distribution method ensures that users' interests are not diluted due to excessive issuance.

The issuance mechanism of USUAL is directly linked to the cash flow generated by the stablecoin collateral. Every time a user stakes USD0, the protocol mints new USUAL tokens. As the protocol's income increases, the token supply will also increase. This design ensures that the issuance speed of the tokens does not exceed the economic growth rate of the protocol, avoiding rapid inflation.

Usual's token issuance is a deflationary model, with the issuance rate carefully calibrated to remain below the growth rate of protocol income. This means that as the protocol develops, USUAL tokens will become increasingly scarce, ensuring the long-term stability of the token's value.

Additionally, USUAL holders will participate in the decision-making of the protocol's financial management, determining how to use the protocol's income, such as through token burn or income distribution. This way, holders can not only govern the protocol but also influence its financial strategy and long-term development.

Finally, USUAL holders can earn rewards by staking their tokens. When you stake USUAL tokens, they will convert to USUAL+, and users holding USUAL+ can receive up to 10% of newly minted USUAL tokens, with the specific ratio determined by issuance rules. This not only provides additional yields but also incentivizes users to participate in the protocol's construction and ecological development over the long term.

Is Participating in the USUAL Project Risk-Free?

The emergence of USUAL inevitably brings to mind The DAO and Luna, which were initially highly regarded projects in the crypto space but ultimately collapsed due to contract vulnerabilities or token economics. Although USUAL appears to have great potential, employing innovative token economics and robust security mechanisms, blockchain projects inherently carry certain risks, and no matter how meticulously designed, the possibility of vulnerabilities and attacks cannot be completely eliminated.

USUAL's Security Audits

USUAL has undergone five security audits, conducted by Cantina, which primarily include:

Audits of permissioned smart contract launches, permissionless smart contract launches, L2 token contracts, OFT MintAndBurnAdapter and L1 OFT Adapter, USD0++ and DAO collateral contracts, SwapperEngine and USUAL token contracts, USUAL distribution and airdrop contracts, Blackthorne audits, etc.

Although security audits have been thoroughly conducted, the methods of private key management have not been disclosed. Given the precedents of DEXX and Radiant, this does not guarantee that USUAL is entirely safe.

Are There Defects in USUAL's Security Monitoring?

The monitoring framework provided by the USUAL official documentation is already quite 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 may not have 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 attacks in the protocol's interactions with external systems, the existing monitoring may not be able to detect issues in a timely manner.

Threshold Settings:

In the threshold alert system, abnormal trading volumes, significant token fluctuations, or price volatility may trigger alerts. However, market volatility and certain special events (such as large-scale trades or market adjustments) may be misinterpreted 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 reports, leading to delayed responses or misleading information.

Potential Risks of Multi-signature:

As seen in the case of Radiant being hacked, although the activities of multi-signature wallets are monitored in real-time, the multi-signature itself may carry the risk of mismanagement. If members participating in the signing make mistakes, are hacked, or engage in malicious behavior, the monitoring system may not be able to detect abnormal authorization operations in advance.

Conclusion

The USUAL protocol excels in innovation, adopting a token issuance model linked to actual income, ensuring long-term value growth. Additionally, its security mechanisms are robust, with features like automatic "circuit breakers" that can immediately pause operations upon detecting risks, protecting user assets. However, there are also some potential risks, such as the possibility of the automatic defense mechanism misjudging or missing alerts, and the security of multi-signatures and external interfaces also requires ongoing attention.

Overall, USUAL's design offers promising solutions to address speculation issues in blockchain protocols and enhance security.

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