Usual Project Analysis: The Logic Behind the USD0++ De-pegging Event

Recently, the USD0++ stablecoin issued by Usual has depegged, sparking heated discussions in the market. This article will systematically analyze Usual's product logic, economic model, and the reasons behind the depegging of USD0++ from the perspective of DeFi product design.

Usual Product System

Usual mainly has 4 types of tokens: stablecoin USD0, bond token USD0++, project token USUAL, and governance token USUALx. Its product logic can be divided into three layers:

Layer 1: Stablecoin USD0

USD0 is a collateralized stablecoin, backed by RWA assets. Users can mint USD0 in two ways:

1. Directly mint RWA assets
2. Exchange USDC for USD0 through the Swapper Engine contract.

Second Layer: Enhanced Treasury Bond USD0++

USD0++ holders can share the interest of underlying RWA assets, as well as a distribution of 45% of the daily newly added USUAL tokens. Users can stake USD0 1:1 to mint USD0++, with a default lock-up period of 4 years.

Layer 3: Project tokens USUAL and USUALx

Users can obtain USUAL by staking USD0++ or purchasing it from the secondary market. USUAL can be minted into governance token USUALx at a 1:1 ratio.

Analysis of the USD0++ Depegging Event

On January 10, Usual announced changes to the redemption rules for USD0++:

1. Conditional redemption: at a 1:1 ratio, but you have to give up some USUAL收益
2. Unconditional redemption: no deduction of earnings, but the minimum redemption ratio is reduced to 87%

This change has triggered market panic, and the price of USD0++ has plummeted.

The possible reasons behind ###

1. Precision Blasting Loop Loan

Many users engage in USD0++ circular loans through the Morpho lending protocol, creating high leverage. The floor price of 0.87 is just slightly higher than Morpho's liquidation line of 0.86, which can liquidate these high-leverage positions.

2. Save USUAL coin price

Through a conditional redemption mechanism, part of the USUAL will be destroyed or distributed to holders to alleviate the death spiral.

Exposed Issues

1. Users did not carefully read the documentation when participating in DeFi projects.
2. The project team’s decision-making is too centralized, lacking effective community governance.
3. The DeFi industry is continuously learning and evolving, but still needs to approach new projects with caution.