In-Depth Analysis of Usual Events: USD0++ Depeg and the Hidden Reasons Behind Cycle Loan Get Liquidated

Recently, the USD0++ stablecoin issued by Usual has experienced a de-pegging event that has attracted widespread attention in the market. This article will systematically analyze Usual's product logic, economic model, and the deeper reasons behind the USD0++ de-pegging from the perspective of DeFi product design.

Usual Product System

Usual has 4 main tokens:

1. USD0: Stablecoin, issued with RWA assets collateralized 1:1
2. USD0++: Bond-type tokens, minted by staking USD0
3. USUAL: Project Token
4. USUALx: Governance Token

USD0 stablecoin

USD0 is a collateralized stablecoin that uses RWA assets as collateral. Currently, most USD0 is minted by USYC, with a small portion using M as collateral.

Users can mint USD0 in two ways:

1. Directly mint RWA assets
2. Transfer USDC to the RWA provider, who will mint on your behalf.

USD0++ Bond Token

USD0++ is similar to a tokenized 4-year floating-rate bond. Users can stake USD0 at a 1:1 ratio to mint USD0++, with a default lock-up period of 4 years.

USD0++ holders can receive two parts of the earnings:

1. Corresponding returns of underlying RWA assets
2. Daily additional USUAL token allocation earnings

USUAL and USUALx

USUAL is the project token, which can be obtained by staking USD0++ or purchasing directly.

USUALx is a governance token, minted 1:1 by staking USUAL. USUALx holders can receive 10% of the USUAL issuance.

USD0++ Depegging Event Analysis

On January 10th, Usual announced a modification to the USD0++ redemption rules:

1. Conditional Redemption: 1:1 redemption, but requires paying part of the USUAL earnings.
2. Unconditional Redemption: A minimum of 87% of USD0 can be redeemed.

This announcement triggered panic in the market, and USD0++ significantly decoupled.

Analysis suggests that Usual's move has two purposes:

1. Precise liquidation of revolving loans. The floor price of 0.87 is just above the liquidation line of 0.86 on the Morpha lending platform, allowing for the liquidation of revolving loan positions without causing bad debts on the platform.

2. Save the price of USUAL coin. Encourage more people to stake USUAL to obtain USUALx through a conditional redemption mechanism, reducing market circulation.

Exposed Issues

1. Users did not carefully read the documentation when participating in DeFi projects.

2. The project party's decision-making is too centralized, lacking community governance.

3. The industry is constantly evolving, and new projects learn from the lessons of the past.

Overall, this incident reflects that there are still many issues in the DeFi industry, but the overall ecosystem is still evolving. We should remain cautiously optimistic and continue to pay attention to industry development.