"Usual" Launches USD0 Stablecoin, Challenges Established Profit Distribution Models

Usual, a novel stablecoin protocol, has recently announced the launch of its mainnet. The protocol is introducing a new stablecoin dubbed USD0, aiming to compete with industry leaders like Tether’s USDT and Circle’s USDC. The core philosophy driving Usual is to “give back the power to the users,” by allowing them to decide how the protocol’s revenue should be distributed.

Traditionally, leading stablecoin issuers such as Tether and Circle have made substantial profits by investing user funds in government bonds. For instance, Tether reported profits exceeding $4.5 billion in the first quarter of 2024 alone. These profits, however, are typically distributed among a limited group of shareholders.

Usual, however, seeks to disrupt this model by pioneering a fairer financial ecosystem where profits are shared among all participants. The profits generated by the protocol will be pooled into a treasury, with $USUAL token holders having a say in their distribution.

According to the project’s documentation, the USD0 stablecoin is backed solely by secure, short-term assets like US Treasury Bills obtained through overnight repos. Usual Labs has conducted extensive due diligence to select the initial collateral, ensuring the mitigation of any counterparty or default risks.

There are two avenues through which users can mint USD0. One can directly mint by depositing eligible RWA  into the protocol, receiving an equivalent amount of USD0 on a 1:1 basis, or indirectly mint by depositing USDC, facilitated by a collateral-provider who supplies the necessary RWA collateral.

USD0 is a Liquid Deposit Token (LDT) that represents the holder's right to claim assets from the protocol. It does not earn any interest and is backed 1:1 by the deposited asset. LDTs can be traded freely, and holders can redeem their underlying assets at any time. 

To earn rewards distributed by the protocol, LDTs like USD0 can be used to create Liquid Bond Tokens (LBTs), which lock the underlying LDT for a set period. When you lock USD0, you turn it into USD0++. This token is also fully liquid and can be bought and sold on secondary markets. Note that USD0++ earns both the native yield from the Real-World Asset (RWA) and additional $USUAL rewards.

Currently, Usual is in a pre-launch phase and is hosting an airdrop campaign to incentivize users who provide liquidity. Participants can earn Usual Pills, which are pre-launch points determining the quantity of $USUAL tokens received during the launch. These tokens represent 7.5% of the $USUAL supply created at the TGE. 

The pre-launch campaign has already garnered significant attention within the DeFi community, attracting over $87 million in total locked value within just 24 hours. According to the project’s estimates, this TVL  is expected to generate approximately $4.1 million in revenue for the protocol.

The campaign is set to last four months, after which the project will release its token. For those interested in participating and potentially earning Usual Pills, visit https://app.usual.money/ to learn more and engage with the platform.