At the outset, Usual established itself as a new player in decentralised finance (DeFi) with a clear promise: to democratise access to real-world assets (RWAs) via an innovative stablecoin, USD0. Presented as an alternative to industry giants such as Circle's USDC and Tether's USDT, the project aims to offer a more decentralised approach.
Launched a few months ago, USD0 is based on a simple principle: each token is entirely backed by US Treasury bonds, guaranteeing stability close to the dollar. A strategy that seems to be paying off, as the stablecoin currently ranks as the world's 7ᵉ largest stablecoin capitalisation according to DeFiLlama. Its growth was particularly marked between December and January, during which its capitalisation tripled to more than $1.5 billion.
To complement this, Usual offers a second product: USD0++, which uses the Liquid Staking principle applied to stablecoins. Unlike USD0, this is not a classic stablecoin, but a token enabling returns to be generated via a staking mechanism.
Concretely, by immobilising USD0 in the protocol, the user receives USD0++, which works like a tokenised bond. This generates interest paid in USUAL, the protocol's native token. Two options are then available to investors:
Recover the interest in USUAL. Do not claim it and benefit from a guaranteed minimum return in USD0, via a compensation mechanism built into the protocol. After four years, the user recovers their initial capital in USD0, securing their investment while benefiting from returns.
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Why is USD0++ not a stablecoin? In recent weeks, the topic of USD0++ has been widely debated on X (formerly Twitter) and other platforms, fuelling persistent confusion: contrary to what many threads and discussions have suggested, USD0++ is not a stablecoin.
How it works is more complex and more akin to a zero-coupon bond, a financial instrument well known in traditional finance.
Unlike traditional bonds, which pay periodic interest, a zero-coupon bond generates no intermediate payments. The investor acquires it at a price below its face value and collects his gain when it reaches maturity.
For example, a bond bought for $850 can be redeemed for $1,000 after 5 years, generating a gain of $150 without regular interest payments.
The USD0++ is based on the same principle: its initial price is around $0.87 and it gradually appreciates to $1 after 4 years (the maturity of the underlying Treasury bonds). But with an extra special feature:
Holders can collect their interest in $USUAL, the protocol's native token. If they don't claim it, a guaranteed minimum return in USD0 is reserved for them. This hybrid mechanism makes it possible to incorporate staking dynamics into an asset whose valuation is programmed over time, but without guaranteeing immediate price stability like a traditional stablecoin.
In theory, this operation seems perfectly framed. But if you follow crypto news, you probably haven't escaped the controversy that rocked Usual in January. An event that highlighted several limitations and raised questions about the viability of the protocol.
A sudden change in the conditions for redeeming USD0++ Until 9 January, users could still freely exchange their USD0++ for USD0 at a fixed rate of 1:1 directly via the Usual protocol. But on the night of 9 to 10 January, an unexpected turnaround occurred: parity conversion was replaced by a minimum threshold of $0.87, a change that took much of the community by surprise.
This new adjustment was intended to align USD0++ with its true nature: a zero-coupon bond associated with a token-issuing mechanism. Until this announcement, many investors still considered this asset to be a stablecoin, despite its more complex structure.
This change had immediate consequences for the market. Those who had invested in USD0++ thinking they could convert it at any time to parity with USD0 suffered a sudden devaluation. At the height of the volatility, the loss reached up to 14%.
The problem lies not so much in the nature of USD0++, but rather in the way the transition was managed. Officially, Usual had made it clear from the outset that this was not a stablecoin and that the 1:1 redemption mechanism had a temporary grace period.
But several points fuelled user frustration:
The whitepaper did mention the end of this period, but without specifying the exact date. Initially, it was only stated that it would end in the first quarter of 2025. No proactive communication was made upstream to clearly alert the community to this imminent change. The announcement was sudden, making it impossible for investors to anticipate. The result: many users found themselves stuck with their USD0++ for four years or forced to sell at a loss.
The timing of this change was also questionable. Usual changed its mechanism just after a period of strong growth, just as the total locked-in value (TVL) reached an all-time high (ATH) of USD1.9 billion.
Another troubling element: the change came shortly after the mid-December airdrop, an event that had attracted a massive influx of users, seduced by the returns and the prevailing optimism about X. Airdrops often augur the departure of some of the liquidity to other apps to "farm" in order to receive a new airdrop.
This sequence highlights a major challenge for Usual: managing the trust of its community in an ecosystem where transparency and communication are essential.
The consequences: plummeting TVL, token collapse and market reactions On 8 January, on the eve of the mechanism change, Usual's TVL reached its all-time high with around $1.9 billion deposited on the protocol (source ). But since then, the trend has reversed. In the space of two months, TVL has plummeted by $800 million to $1 billion, a decline that continues to worsen day by day. At the time of writing, no stabilisation has been seen.
Already in decline before the announcement, the USUAL token has only accelerated its fall in a difficult market environment for altcoins. Attributing its entire decline to the protocol's turbulence would be an exaggeration, but the bad press surrounding USD0++ clearly hasn't helped.
Another problem: USUAL is an inflationary token, distributed to USD0++ holders in the form of rewards. This constant selling pressure contributed to an 85% collapse relative to its ATH.
The situation quickly inflamed X, where several figures in the crypto community spoke out. Some even accused Adli.eth (Adli Takkal Bataille), one of the protocol's co-founders, of using Usual's treasure to liquidate users. An accusation that ultimately proved unfounded.
But beyond these controversies, the change to the mechanism had much wider repercussions, affecting several protocols interconnected with Usual.
Pendle PT pools, supposed to be among the safest, went negative, causing tension within the DeFi community.
MEV Capital, which had launched a USD0 vault on Morpho with a 10% performance fee, was also caught up in the storm. Many users had put up their USD0++ as collateral to borrow USDC, thinking that the asset would remain stable. Fortunately, the liquidations were limited thanks to the hard-coded oracle in place, which prevented carnage. But another problem emerged: users found themselves stranded in the vault, unable to withdraw their funds without incurring losses.
Faced with criticism, MEV Capital defended itself on social networks and quickly suspended performance fees to calm the situation.
But in the space of a few weeks, Usual went from a fast-rising project to a protocol under intense scrutiny. The fall in its TVL, the collapse of its token and the controversies surrounding its management of the crisis raise a key question: can it regain the confidence of investors?
How has Usual reacted to the crisis? Faced with the controversy surrounding USD0++, Usual had no choice but to react. On 10 January, the protocol published a statement on X (formerly Twitter) apologising for the removal of the 1:1 ratio between USD0 and USD0++. But beyond the apology, the team sought to reassure its community by proposing several initiatives to offer exit solutions to impacted users.
1/ An early redemption mechanism subject to conditions
Usual has introduced a facility allowing holders of USD0++ to exchange them for USD0 at a 1:1 ratio without waiting 4 years. However, this conversion involves the payment of a certain quantity of USUAL tokens, the amount of which varies according to supply and demand.
Users' contribution is capped at the equivalent of six months' worth of USUAL rewards per USD0++, and the tokens collected are distributed as follows:
33.33% are burnt to reduce the supply in circulation, 66.67% are redistributed to long-term holders via USUALx and USUAL* (staked USUAL tokens). This mechanism allows for early exit, but at an additional cost, which has drawn criticism from the community.
2/ An iUSD0++ vault backed by sUSDe
To offer an alternative to USD0++ holders, Usual has announced the creation of an iUSD0++ vault designed to optimise the value of locked-in assets. The scheme is based on a temporary exchange of USD0++ for USD0, which is then placed in sUSDe, a stablecoin that generates returns.
This gives users a double benefit:
- They continue to receive rewards in USUAL, as if they still held USD0++,
- They benefit from the returns of sUSDe, improving their profitability.
However, this safe is not yet available, limiting its immediate impact.
3/ A new USD0++/USD0 liquidity pool
Usual has also launched a liquidity pool dedicated to trading between USD0++ and USD0. The aim is to make the market more fluid and ensure a more stable price for USD0++, thereby facilitating transactions between the two assets.
At the same time, in February, the protocol introduced the USL (Usual Stability Loan), a mechanism enabling USD0 to be borrowed at a fixed rate by pledging USD0++ as collateral.
A sufficient response?
With three initial measures, Usual hoped to reassure users and restore balance. However, some observers point out that these solutions still involve costs or constraints for USD0++ holders, casting doubt on their effectiveness in fully restoring confidence. Especially since iUSD0++ remains unavailable to date. In other words, these initiatives seem primarily implemented to contain immediate user discontent.
But Usual didn't stop there.
In February, the platform launched the Usual Stability Loan (USL), a mechanism allowing users to borrow USD0 at a fixed and reduced rate by using USD0++ as collateral. This system provides users with access to liquidity without having to part with their assets, while continuing to earn rewards. A strategy that seems to be bearing fruit: in just one month, approximately 110 million dollars worth of USD0++ have already been deposited on Euler.
As early as January, Usual had also activated the Revenue Switch, a mechanism redistributing 100% of the protocol's monthly revenues to USUALx stakers on a weekly basis. To be eligible, tokens must remain staked throughout the entire weekly epoch. Currently, these distributions amount to approximately 700,000 dollars per week, or 2.8 million dollars per month in USD0 – a significant supplement to USUAL staking yields.
With the growth in Total Value Locked (TVL) and protocol revenues, yields for USUALx holders should follow the same trajectory. The continuous increase in the number of staked USUAL tokens, regularly reaching new highs, demonstrates growing interest in this redistribution model.
@desnakeee /$USUAL analyticsA simple accident or a systemic problem? The question deserves to be asked. Adli Takkal Bataille explained on 10 January that warning users in advance of the change in mechanism could have doomed the protocol . An argument echoed by the other co-founder Pierre Person during his interview on The Big Whale , who believes that this episode does not call into question the foundations of Usual.
But this justification raises questions. If a simple announcement could jeopardise the protocol, wouldn't this be a sign of a fragile architecture?
Adli Takkal Bataille defends this approach though, explaining that finance is an "individual game" and that revealing this change would have caused a fatal chain reaction.
He also describes the extreme case of a premature announcement that could have prompted too many users to massively exchange their USD0++ for USUALs, diluting other holders and reducing future DAO revenues.
This drop in revenue would have led to a fall in the price of USUAL, accelerating the exodus of users and further weakening the ecosystem and leading to its demise.
While the communication error is obvious, it nevertheless seems to have done the Usual project a lot of good by preventing a flight of capital. But this strategy was to the detriment of users, who had not fully grasped the subtleties of the protocol. Some even believe that this "accident" was not an accident at all, but rather a necessity to preserve the project.
It's hard, then, not to wonder: why not have directly set the real price of USD0++ from the outset? Was it simply to make it easier to attract liquidity through attractive yields and to facilitate the marketing of the protocol? A question that remains unanswered.
What long-term impact? Whether in terms of image or adoption, the management of this crisis has inevitably left its mark. Yet trust is a key element for a stablecoin, especially when it is based on a model as innovative as USD0++. If Usual fails to reassure its community and demonstrate the viability of its mechanism, its development could be seriously compromised. Since the change was announced, the protocol's TVL has been falling steadily, illustrating an undeniable loss of appeal.
The communication surrounding this affair also appears contradictory. On the one hand, Usual claims that announcing the change in advance would have jeopardised the protocol. On the other, the team downplayed the incident as a simple communications problem. One thing is certain: transparency and education around these mechanisms should have been at the heart of the strategy long before the situation got out of hand.
But does this episode signal the end of Usual? Not necessarily. Other projects have gone through major crises before bouncing back.
Let's take the case of Solana. Between 2021 and 2022, the network suffered several breakdowns, tarnishing its reputation. Then, the collapse of FTX - which held a significant amount of SOL - caused the price of the token to crash by more than 80%. However, in the space of a year, Solana has bounced back: no major outages have been reported for over a year, technical improvements have strengthened the reliability of the network, and the ecosystem has regained the interest of developers. The price of SOL reached a new ATH recently, and the ecosystem's TVL has exploded.
Not all projects evolve in the same context as Usual, however. Each crisis is unique, and in the crypto world, turnarounds are common. A protocol can go through a phase of decline before bouncing back, depending on the strategic choices adopted.
Today, Usual's future depends on its ability to restore the confidence of its community. The project's credibility has been shaken, and the impact of this crisis is still too recent to hope for an immediate turnaround. What happens next will depend on how Usual adapts its model and, above all, on its ability to prove that its foundations remain solid.
The Big Whale's opinion A number of players bear some responsibility in this affair. On the one hand, some investors did not take the time to analyse the protocol's documentation in depth, relying mainly on threads about X and the promising returns touted by Usual. On the other, the protocol itself should have been far more transparent.
While the team has acknowledged a communication error, the co-founders have repeatedly presented this change as a strategic necessity for the project's survival. In reality, the decision has had the practical effect of locking in the funds of certain users, raising questions about the balance between risk management and investor protection.
While certain elements were indeed mentioned in the whitepaper, they were not put forward explicitly, which poses a problem for a protocol as complex as Usual. The sudden announcement of the change in mechanism exacerbated the situation, all the more so as it was followed by a FUD campaign that exacerbated the panic. Added to this was a marketing strategy that mainly emphasised the benefits, downplaying the risks and constraints of the business model.
Whether we consider this crisis to be a simple communications error or a conscious strategic choice, one thing is certain: this decision has, for the time being, served Usual's interests more than those of its users.
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