Stablecoins generate billions of dollars in revenue every year, but they are non-profit shares with depositors. However, this model is being challenged by Usual Money. Usual aims to rebuild stablecoin (Tether) fully on-chain, supported by infrastructures, so users can get more neutrality, transparency, and security. It also aims to create a fairer financial system by redistributing value and power more equitably among all users.

What is Usual?

Usual is a decentralized issuer of fiat-backed stablecoins, leveraging tokenized real-world assets (RWAs) from entities like BlackRock, Ondo Mountain Protocol, M0, or Hashnote. It offers a stablecoin called USD0, which is permissionless, transparent, and verifiable on-chain. Usual’s unique approach redistributes ownership and governance through the USUAL token, allowing users and third parties to benefit from the platform’s value and revenues, similar to how Tether operates but with shared ownership of the underlying assets. This model rewards early adopters, promotes long-term value creation, and ensures the stablecoin remains fully collateralized, avoiding the risks associated with traditional banking systems.

Usual Background

Founded in 2022 in France. As a private sector, Usual Lab raises $7M in strategic funding from over 150 investors and secures $75M in Total Value Locked (TVL). Some of the core partners include the Morpho protocol, Curve, Arbitrum, Balancer, and Layer Zero. The Usual team is a dynamic blend of visionaries and professionals that merges the best of worlds: from traditional finance to cutting-edge DeFi. The team includes Pierre Person as CEO, Hugo Sallé as COO, and Manfred Tourron as CTO.

Usual’s Main Products

Usual offers several products focused on decentralized finance and stablecoins. All products enable users to access stablecoins with built-in security and governance features alongside the USUAL token that redistributes ownership and platform control.

USD0 Stablecoin

USD0 is a liquid deposit token (LDT) and the first stablecoin of the Usual protocol. USD0 is backed by 1:1 Real-World Assets (RWA) that aggregate short-term assets US Treasury Bill tokens, providing a secure, bankruptcy-remote solution unlinked to traditional bank deposits. Like other tokens, USD0 is transferable and permissionless and has full accessibility within the DeFi ecosystem. USD0 is named from central bank money (M0). M0 refers to the most liquid form of money: cash, which provides a safer and more transparent alternative than USDT and USDC with value storage. Its features include:

• Real-time transparent reserves, avoiding fractional reserve practices.
• Unifies liquidity from different deposits, creating an efficient ecosystem.
• Aims to be backed by cash equivalents from various issuers for further stability.
• Ensures users can redeem at any time, supporting stable value.
• Fully collateralized by US Treasury bills and repo, reducing risks linked to commercial banks.

Usual’s USD0 aims to unify liquidity between traditional finance (TradFi) and decentralized finance (DeFi), ensuring transparency and security for users. Through shared governance via the USUAL token, it redistributes ownership and revenue to stablecoin holders, unlike traditional fiat stablecoins, where holders do not benefit from the platform’s rising revenues.

Users wanting to mint USD0 then RWAs must deposit into the protocol, which can be done in two ways. Users can directly deposit eligible RWAs to receive USD0 1:1 or use a third party to deposit USDC to receive USD0. In this method, a third party known as the collateral provider (CP) supplies the necessary RWA collateral, enabling users to obtain USD0 without directly holding RWAs. Users can also withdraw assets by doing the same process.

USD0++ Enhanced TBill

USD0++ is an enhanced version of USD0 with boosted 4-year DeFi T-bill. It allows users to benefit from protocol and revenue and distributes ownership of the protocol through its reward mechanisms. It provides a risk-free rate while guaranteeing the risk-free yield in a USUAL token.

To make USD0 more rewarding, users can purchase USD0++ and lock USD0 for up to four years. In return, they receive yields either in USUAL tokens or USD0, along with transferable USD0++ tokens. USD0++ users are eligible for ongoing rewards through the “Pills” campaign airdrop. After the campaign concludes, USD0++ will generate returns in the form of USUSL tokens, providing additional incentives and yield to users participating in the protocol. Some of the other features USD0++ include:

• USD0++ is backed by locked USD0 for four years
• It is designed to exceed the risk-free yield
• USD0++ has the ability to distribute ownership of the Usual protocol
• USD0++ is not linked to the volatility of interest rates if they rise or fall

USD0++ Alpha Yield

To participate in alpha yield, they must lock their USD0 in a USD0 liquid bond (USD0++) for a specified period, which will be distributed in the form of USUAL tokens. The yield from USD0++ is called Alpha Yield (α-yield) because it includes an additional token with its own volatility and pricing.

Base Interest Guarantee (BIG)

To ensure a minimum yield, USD0++ features a mechanism called the Base Interest Guarantee (BIG). This mechanism gives users a choice to earn yield in USUAL tokens. To participate in BIG, users must lock their USD0++ for six months; after that, they can choose between rewards in the form of USUAL tokens or rewards in USD0.

Parity Arbitrage Right (PAR)

Given these features, the expected market fair value should be at parity. To ensure safety in the crypto space, the USUAL DAO has the right to unlock a bond through the Parity Arbitrage Right (PAR).

What is the USUAL Token?

The USUAL is a governance and ownership token within the USUAL protocol, structured to have long-term value and give a range of benefits to its holders. Benefits include stake rewards, exclusive services, and value accrual through buybacks. The USUAL token gives holders active roles in key decisions, such as Treasury management, collateral policies, and revenue-sharing frameworks. The token’s deflationary model aligns its value with the protocol’s growth. Unlike other governance tokens that offer limited benefits, USUAL’s design is community-centric, with 90% of the supply distributed to users to ensure fair engagement and prevent centralized control.

Currently, the USUAL token has two main utilities: staking and liquidity incentives. When users stake their USUAL tokens, they earn rewards in the form of additional USUAL tokens based on the current emission rate. Additionally, liquidity incentives are provided to liquidity providers if token holders support their pool, rewarding them for contributing to the protocol’s liquidity and stability.

The USUAL token features a deflationary design, with supply adjusted based on the locked Total Value Locked (TVL), increasing its scarcity and value. New USUAL tokens are issued only when USD0++ tokens are minted, tying issuance to TVL and protocol revenue. As TVL grows, the issuance rate per dollar decreases, accelerating with expanded TVL. This means fewer USUAL tokens are distributed over time, leading to reduced token availability per dollar of TVL and enhancing long-term value for token holders.

Audits on Usual

To address the high vulnerability of smart contracts in DeFi protocols, Usual has prioritized extensive risk mitigation measures. This includes conducting detailed audits by leading experts and identifying potential security flaws, logical errors, or inefficiencies. As of now, Usual has conducted six smart contract audit to achieve the highest level of protocol security.

What Are Usual Pills?

Pills are points before launch that can be earned by different activities within the protocol. These Pills determine how many USUAL tokens users will receive during the airdrop. These purple pills represent smart choice—collect as many as possible to secure your escape when the time comes. Pills can be earned in the Pills campaign, which is designed to reward users who contribute liquidity during the bootstrapping phase of the protocol. The Pills campaign airdrop is scheduled for Q4 2024 after the pre-launch period ends in mid-November 2024. To maintain transparency, all distributed Pills can be seen on the website.

Conclusion

By giving ownership to users, Usual aims to create an environment where they feel confident in the security of their capital and the protocol’s fairness. Usual’s community-centric approach prioritizes transparency, rewards, and governance participation, raising a sustainable ecosystem that empowers users to contribute to and benefit from decentralized finance.