From 0.2 to 1.3, Depth interprets the advantages of Usual.

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

Tether and Circle earned over $10 billion and their valuation exceeded $200 billion in 2023, but this wealth has nothing to do with users. Their model privatizes the profits of user deposits and transfers the risks to society. Such a mechanism, similar to the problems of traditional banking, completely goes against the original intention of decentralized finance.

Usual provides a new stablecoin concept: redistributing value and power, allowing users to truly become the owners of the system. Through governance tokens, Usual returns all the profits and decision-making power generated by the protocol to the community, so that every participant can share the benefits of the ecological 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. Unlike Tether and Circle, it is a decentralized issuer rather than highly centralized. The recent hot $USUAL in the circle is their issued Token used for redistributing ownership and governance.

USUALLY first appeared in people's field of vision earlier 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 like Tether and Circle, making it almost impossible for ordinary users to benefit from it. This centralized model not only deprives users of their rights to income, but also limits the development of stablecoins to the control of a few institutions.

In response to this market pain point, a new solution has been proposed: empowering users through decentralization, making them core participants in protocol infrastructure, funds, and governance, thus breaking the monopoly of traditional stablecoins.

The governance token of Usual, $USUAL, realizes a 100% redistribution of value and control, ensuring that community users have the dominant power. By distributing governance tokens, the protocol returns profits to value-contributing users and third parties, optimizing financial incentives and giving 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 dynamic and inclusive.

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

• Traditional Mode: For example, Tether, all income is distributed to its shareholders. Users can only get a DeFi-compatible stablecoin, but cannot enjoy the benefits or dividends of the rise of the protocol.
• Income-type stablecoins: Issued by institutions such as Ondo or Mountain, allowing users to share basic income through permission mechanisms. However, users can only earn income and cannot benefit from the protocol's rise. For example, regardless of whether the TVL of USDM is $100 million or $100 billion, the user's income is always fixed at 5%.
• Usual Mode: Usual combines income with rise. By reallocating value through the $USUAL governance Token, users not only receive stable coin income, but also own 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.

The three core products of USUAL

Usual's core products include: USD0, USD0++, and USUAL governance Token. The three together constitute the core ecosystem of Usual.

USD0

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

USD0++

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

USUAL Governance Token

USUAL Governance Token is the core of the entire Usual Protocol, which endows holders with decision-making power and governance rights in the protocol. Through decentralized governance mechanisms, USUAL Token enables users to not only participate in the management of the protocol but also benefit from its 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 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 a decentralized mechanism.

USUALToken Economics

Nowadays, many governance tokens in the market have some design issues. Most token models are basically copied and fail to effectively balance the interests of short-term speculators and long-term investors. As a result, token prices are easily influenced by speculation, resulting in selling pressure. At the same time, there is not much close connection between the value, governance, and income potential of these tokens. Instead, they rely more on market popularity to push up prices, ignoring the creation of 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, eventually 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, primarily used for governance and also provides economic benefits to holders. The value of the Token comes from the economic rights it represents and the actual income generated by stablecoin collateral. In simple terms, 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 mainly distributes 90% of the USUAL tokens based on the total locked value (TVL) of USD0 to users who contribute value and revenue to the protocol, in order to avoid excessive dilution. The total amount of tokens held by the team, investors, and advisors will not exceed 10% of the total supply. This distribution method ensures that the interests of users will not be 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 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 does 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 rate 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 token burning or income distribution, etc. In this way, holders can not only govern the protocol but also influence the protocol's financial strategies and long-term development.

Finally, USUAL holders can also earn rewards by staking tokens. When you stake USUAL tokens, they will be converted into USUAL+. Users holding USUAL+ can receive up to 10% newly minted USUAL tokens, the specific ratio is 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 a stable and risk-free way to make profits?

The emergence of USUAL inevitably reminds people of The DAO, Luna, which was also a project highly regarded by the entire coin circle at first, but eventually collapsed in an instant due to contract vulnerabilities or Token economics. Although USUAL looks very promising, adopting innovative Token economics and powerful security mechanisms, blockchain projects themselves are inherently risky. No matter how carefully designed, the possibility of vulnerabilities and attacks cannot be completely eliminated.

Security Audit of USUAL

USUAL currently has had 5 security audits, with Cantina being the auditing agency, and its main auditing work 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 is sufficient, the private key management and other methods have not been disclosed. After all, there are precedents like DEX and Radiant, so it does not necessarily mean that USUAL is safe.

Does USUAL security monitoring have any defects?

The official documentation provided by USUAL has already been very comprehensive in terms of monitoring framework, but there are still some small 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 in the interaction between the protocol and external systems or if attackers exploit them, existing monitoring may not be able to detect the issues in a timely manner.

Threshold settings:

In the threshold alert system, abnormal trading volume, large fluctuations in Token or price may trigger an alert. However, market volatility and certain special events (such as large-scale trading or market adjustments) may be mistaken for abnormal behavior. If the threshold setting is not intelligent enough or does not adapt to market changes, there may be excessive alerts or missed reports, leading to insufficient response or misleading results.

Potential risks of multi-signature:

Just like the case of Radiant being stolen, although the activities of multi-signature wallets are monitored in real time, there may be risks of improper management in the multi-signature itself. If the members involved in the signature make mistakes, are hacked, or engage in malicious behavior, the monitoring system may not be able to detect abnormal authorization operations in advance.

Last

The USUAL protocol has done a great job in innovation, adopting a Token issuance model linked to actual income to ensure long-term value rise. In addition, its security mechanism is also very strong, like the automatic "circuit breaker" that can immediately pause 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 the speculation problem and enhances security in blockchain protocols.