Before we get started, this is not a recommendation or endorsement to buy any token(s) mentioned.
This week, we cover a new decentralized dollar-pegged, RWA-backed stablecoin called USD0, where the underlying yield and ownership is redistributed to USUAL tokenholders.
Commonly referred to as “tether,” USDT is the world’s most popular dollar-pegged stablecoin, with nearly $115B in liquidity. The second most popular fiat-backed stablecoin is USDC with a market cap of $34B. Tether and Circle combined generated over $10B in revenue in 2023. However, none of this revenue is shared with their own users who contribute greatly to their respective protocol’s success.
Meanwhile, Real-World Assets (RWAs) are growing, and have arguably flipped all of DeFi as the most dominant sector if we reconsider that fiat-backed stablecoins are in fact, RWAs. After years of relying on USDT and USDC for DeFi, there is now an “800-lb gorilla in the room” because these stablecoins permeating every sector of DeFi are backed by US dollars, which have been deposited into US Treasury Bills off-chain, meaning there is real underlying risk to holding USDT or USDC.
Why should we as users be exposed to all the risks of holding a stablecoin like this, but never get to share in the benefit the US T-bill yield being earned? The current yield distribution model of Tether and Circle fails to adequately incentivize users who take on such risks, while helping these stablecoins to grow as early adopters.
Usual introduces a new model that aims to rebuild Tether and USDC’s business fully on-chain. In this new system, the issuer is controlled by the holders of the USUAL governance token, including decision-making over risk policies, the nature of the collateral, and liquidity incentive strategies, similar to if USDT holders could take ownership of the Tether company and the underlying revenues.
Think of Usual as a multi-chain infrastructure aggregating DeFi RWAs from entities such as BlackRock, Ondo, Mountain Protocol, M0 or Hashnote to transform them into a permissionless, on-chain verifiable, and composable stablecoin–USD0.
Usual is intended to provide an alternative to fiat-backed stablecoins that privatize profits from customer deposits while socializing any losses. Usual is built off the idea that centralized actors behind major fiat-backed stablecoins such as Tether or Circle, only replicate the problematic structures of TradFi, which contradict the principles of DeFi.
Usual’s end goal is to empower users to become owners of the infrastructure, treasury, and governance of the protocol by redistributing 100% of the value and control through its governance token. Similar to other legacy DeFi protocols and farms, the Usual protocol rewards its governance token to users who contribute value by doing things such as minting USD0++ or providing liqudity.
Recently, Usual announced its public launch on Ethereum Mainnet on July 10, 2024. Since then, it has accrued over $123M in deposits, making it one of the most successful DeFi launches this summer. As of this post, the USUAL token has not been issued but there is an ongoing points program (see ways to earn below) called the Usual Pills Campaign, that will translate to a future USUAL token airdrop.
Today, I’ll show how I can start earning yield with USD0 as well as points in the form…
DeFi Dad is one of the earliest power users of DeFi, having worked with early Ethereum startups going back to 2018, including Zapper.
