General Questions

What is Usual Protocol?

Usual Protocol is a fully decentralized protocol designed to enhance security and reliability by transforming the financial ecosystem through the redistribution of power from traditional financial institutions to users, utilizing Liquid Deposit Tokens (LDT) and Liquid Bond Tokens (LBT) to enable stablecoin issuance (USD0) and generate rewards.

What is Usual’s main objective?

Usual aims to create a fair and decentralized financial hub by redistributing power and ensuring asset security and reliability for all users, establishing itself as a cornerstone of the global financial landscape.

Why Usual?

Usual addresses the inequities of traditional finance by ensuring fair value distribution, decentralized control, and aligning financial incentives with user participation, challenging centralized banking models that privatize profits and socialize losses.

Who founded Usual Labs?

Usual Labs was founded by a team of experienced professionals in finance, technology, and product development, dedicated to revolutionizing the financial landscape with innovative solutions.

When will Usual protocol be live?

The Usual protocol is scheduled to launch at the end of Q2 2024, bringing its innovative financial solutions to the market.

Which blockchain will Usual be deployed on?

Usual will be deployed on the Ethereum mainnet, with interoperability planned across multiple blockchains to ensure broad accessibility and integration.

Have Usual contracts been audited?

Yes, Usual’s smart contracts have undergone rigorous audits by multiple reputable cybersecurity firms. The audit results will be publicly available to ensure transparency and trust.

How can Usual scale?

Usual is uniquely designed to surpass the scalability limits often associated with other stablecoins. It is backed by Real-World Assets (RWAs), enabling seamless integration of liquidity from the traditional financial sector. Moreover, Usual's structure actively encourages the introduction of new liquidity by offering incentives to users and can introduce new asset types. This approach ensures that Usual can efficiently absorb and leverage market liquidity and expand beyond stablecoins, fostering extensive growth and robustness within the decentralized finance (DeFi) ecosystem.

How does Usual secure/protect my deposit?

Your deposits are securely held in our smart contracts, remaining passively store and not exposed to any other financial risks associated with Usual. Our smart contracts undergo rigorous audits by various cybersecurity auditors to ensure the safety of user funds and protocol integrity.

How Usual Protocol Works

How does Usual Protocol work?

Usual allows users to deposit yield-generating assets and receive Liquid Deposit Tokens (LDTs). These LDTs can be converted into Liquid Bond Tokens (LBTs), enabling users to earn rewards in USUAL tokens.

What are Liquid Deposit Tokens (LDTs)?

LDTs are tokens received when users deposit eligible assets into the Usual Protocol. They represent the value of the deposited assets and can be redeemed at any time.

What are Liquid Bond Tokens (LBTs)?

LBTs are generated by locking LDTs for a specified period. They allow users to earn rewards in the form of USUAL tokens and provide additional yield opportunities.

What is the USUAL token?

The USUAL token serves as the governance and reward token of the Usual Protocol, redistributing the power on the protocol treasury and aligning user incentives with the protocol’s growth.

USD0, RWA Stablecoin

What is USD0?

USD0 is a Real World Asset (RWA) USD stablecoin. It acts as a Liquid Deposit Token (LDT) representing a RWA deposited within the Usual protocol.

Why USD0?

Usual tackles fundamental challenges in the stablecoin market by blending Real World Assets (RWAs) with a decentralized finance (DeFi) governance model. Here are the key features of our approach:

  1. Redistributive Model: Unlike typical fiat-backed stablecoins that retain all returns for the issuers, Usual equitably aligns risks and rewards, democratizing financial power. This model directly challenges the traditional financial paradigm where profits are privatized and losses are socialized.

  2. Permissionless and Composable: USD0 is designed to be both permissionless and composable, providing users with unfettered access to higher yields and sophisticated liquidity strategies.

  3. Real-time Transparency: To counter the prevalent market opacity, Usual commits to enhancing transparency by automatically providing the latest information on collateral in real time.

  4. Decentralized Issuance: Usual bridges permissioned assets with DeFi through increasingly decentralized governance, reducing dependencies and vulnerabilities associated with centralized control. This approach addresses common failures witnessed in recent collapses among centralized entities.

  5. Scalability: Backed by the deep, liquid Treasury Bill (T-Bill) market, Usual's tokens offer scalability into the trillions, positioning them favorably against cryptocurrency-backed stablecoins that face challenges in handling similar volumes.

  6. Isolated Collateral: The collateral backing Usual tokens is isolated from the balance sheets of entities responsible for their transfer and custody, significantly enhancing security and providing bankruptcy-remote guarantees.

  7. Risk-Free Collateral: Comprising solely of cash or cash equivalents such as short-duration US T-Bills, Usual's collateral ensures robust backing by tokenized real-world assets, maintaining stable 1:1 parity with the U.S. dollar.

  8. Capital Efficiency: All LDTs are backed with full capital efficiency. Users always mint and redeem 1:1, making Usual’s capital efficiency 100% compared to overcollateralized protocols. The Usual treasury acts as overcollateralization as the protocol’s revenues grow.

How to mint USD0?

USD0 tokens can be minted at Usual through two distinct methods:

  1. Direct RWA Deposit: Users can deposit an eligible Real World Asset (RWA) into the protocol and receive an equivalent amount of USD0 on a 1:1 basis.

  2. Indirect USDC/T Deposit: Alternatively, users can deposit USDC into the protocol to receive USD0 on a 1:1 basis. This indirect method involves a third-party collateral provider, who supplies the necessary RWA collateral. This enables users to obtain USD0 without directly handling RWAs themselves.

How to redeem USD0?

$USD0 tokens offer flexible redemption options:

  1. Withdrawal of Underlying Assets: You can directly withdraw the Real World Asset (RWA) that backs your USD0 tokens at Usual's counter. This allows you to seamlessly convert your digital holdings into physical assets.

  2. Secondary Market Transactions: You can also sell your USD0 tokens for USDC or USDT on the secondary market. As USD0 is fully redeemable at Usual's counter, the token maintains a stable 1:1 peg with the underlying asset, supported by continuous arbitrage opportunities, akin to other backed stablecoins.

What is USD0 collateral?

USD0 is backed exclusively by secure, short-term assets, including US Treasury Bills obtained through overnight repos, adhering to Usual's stringent risk policy. Usual Labs has meticulously selected the initial collateral following extensive due diligence of market participants to minimize counterparty and default risks. This strategy affords USD0 holders a level of security that exceeds that offered by competitors.

Usual will soon disclose the details of the initial collateral. Future collateral options may vary, subject to governance decisions aimed at diversifying holdings and mitigating risks, ensuring sustained security and stability for USD0 holders.

What sets USD0 apart as a high-quality stablecoin?

USD0 distinguishes itself as a premier stablecoin, featuring real-time transparency of reserves, eliminating the fractional reserve risks associated with commercial banks. Fully collateralized by US Treasury Bills, USD0 is insulated from the bankruptcy risks that plague other fiat-backed stablecoins dependent on bank-held assets. This robust financial structure ensures that USD0 holders enjoy unparalleled security and stability.

Where can I purchase USD0 tokens?

USD0 tokens can be purchased on the secondary market, initially available on decentralized exchanges (DEXs) and soon to be listed on centralized exchanges (CEXs).

What can I do with USD0 tokens?

USD0 tokens are designed to serve multiple purposes within the decentralized finance (DeFi) ecosystem:

  1. Value Storage: USD0 serves as a stable store of value, ensuring the stability of your digital assets against market volatility.

  2. Liquidity Provision: Utilize USD0 to provide liquidity in various DeFi protocols, enhancing their efficiency and your potential returns.

  3. Investment Opportunities: Transform USD0 into alpha bonds (USD0++), which are yield-generating, locked versions of the token. This conversion offers a productive investment avenue, allowing holders to potentially increase their returns while maintaining asset securit

USD0++, Liquid Bond

What is USD0++, USD0 Liquid Bond?

USD0++ is a version of USD0 that is both wrapped and locked. Those who hold USD0++ are rewarded with USUAL tokens. When the lock period expires, users can retrieve their originally locked USD0 capital.

How does the Liquid Bond product work?

Users can lock their LDT into a Liquid Bond to access α-yield opportunities. These products are fully exchangeable, interchangeable, and tradable, providing liquidity while safeguarding the principal from market volatility.

What is the α-yield for LBT holders?

The α-yield represents the token rewards that LBT holders receive, distributed in the form of USUAL tokens.

How to be entitled to the α-yield for LBT holders?

As an LBT holder, you are automatically entitled to α-yield; your USUAL tokens accrue daily.

At what frequency is the α-yield distributed?

USUAL tokens accrue daily. LBT holders can claim their tokens at any time.

What is the base yield opportunity for LBT holders?

LBT holders are guaranteed a minimum yield equivalent to the risk-free yield of the underlying asset initially deposited. This yield is provided in USD0, ensuring a stable return.

At what frequency is the base yield opportunity distributed?

The base yield opportunity is distributed every six months.

How can LBT holders qualify for the base yield opportunity?

LBT holders can qualify by not claiming their USUAL tokens for the base yield opportunity period (6 months), which entitles them automatically. Alternatively, they can claim their USUAL tokens anytime and lock their LBTs to receive a prorated yield based on the remaining period. Example: I hold an unlocked LBT, claim my USUAL for the first 3 months, then decide to lock my LBT. After the next 3 months (i.e., the end of the 6-month period), I can claim the equivalent of 3 months of base yield opportunity.

If I purchase an LBT on the secondary market, am I entitled to receive the α-yield?

Yes, whether LBTs are acquired via primary issuance or the secondary market, holders are automatically entitled to claim USUAL tokens.

Example: I buy an LBT on the secondary market and am automatically entitled to claim USUAL tokens.

Am I entitled to the base yield opportunity if I buy an LBT on the secondary market?

Purchasers from the secondary market can claim their USUAL tokens daily. To qualify for the base yield opportunity, you must lock your LBT until the end of the current six-month period.

Example: I buy an LBT on the secondary market, am automatically entitled to claim USUAL tokens, and to be eligible for the base yield opportunity, I lock my LBT for the remaining period. At the end of the Base Yield Opportunity (BYO) period, I'm entitled to receive my BYO for that remaining period.

Can I receive both the USUAL and the base yield opportunity simultaneously?

No, you cannot receive both simultaneously.

If I lock my LBT, will I still receive my USUAL tokens?

Yes, locking your LBT entitles you to claim your USUAL tokens and qualify for the base yield opportunity. However, if you claim your USUAL tokens while locked, your LBT becomes unlocked, and you forfeit the base yield opportunity.

Can I re-lock my LBT after unlocking it?

Yes, you can re-lock your LBT, but your eligibility for the base yield will be prorated based on the remaining period.

Example: You lock at day 0, after 3 months decide to claim your USUAL tokens, automatically unlocking. You can re-lock your LBT, and your base yield opportunity will then be calculated over a 3-month period.

Can I claim all my USUAL tokens when I unlock my LBT?

Yes, but be aware that there will be a fee associated with claiming USUAL tokens upon unlocking.

What happens if I don't claim my USUAL rewards?

If you do not claim your USUAL tokens, you can claim them in the future at any time, provided you do not opt for the base yield opportunity.

What happens if I claim my USUAL rewards?

Claiming your USUAL rewards entitles you to the tokens immediately, but you will not be eligible for the base yield opportunity until the end of the current period unless you lock your LBT.

What is the maturity period for LBTs?

The maturity period for LBTs is four years, during which they can be traded at market value.

When can I unlock USD0++ to USD0?

You can sell USD0++ for USD0 anytime on the secondary market; at the end of the maturity period, you can fully unlock the USD0 from your USD0++.

What should be the market value of LBTs?

Due to the base yield opportunity mechanism, the bond receives at least the risk-free yield. For pricing, the discounted cash flow (DCF) model is used, discounting at the risk-free yield. Therefore, the present value of the bond is expected to be 1:1.

What are the risks associated with the Liquid Bond?

The main risks involve potential fluctuations in the α-yield due to market dynamics. However, the design safeguards the principal, ensuring it is never at risk and will be fully returned at the maturity of the USD0++ period under normal conditions.

A guarantee mechanism also provides a fallback to the native yield, minimizing risk. Other risks include fluctuations in the secondary market price. A more comprehensive list of risks can be found in the risk policy.

Getting Started

How do I get started with Usual Protocol?

To get started, deposit yield-generating assets into the Usual Protocol to receive Liquid Deposit Tokens (LDTs).

How do I deposit assets into Usual Protocol?

Deposit eligible assets directly into the protocol’s mint engine to mint LDTs, representing the value of your deposited assets.

How can I generate Liquid Bond Tokens (LBTs)?

Convert your LDTs into LBTs through the protocol, locking them for a specified period to earn rewards in USUAL tokens.

How do I withdraw my assets?

Redeem your LDTs at any time to withdraw the underlying assets from the protocol, ensuring continuous access to your investments.

Security and Governance

How is the security of my assets ensured?

Assets are securely stored in audited smart contracts, protected by advanced security measures and regular audits to mitigate financial risks.

How does Usual protect my deposit?

Deposits are passively stored in secure smart contracts, with rigorous cybersecurity audits ensuring the safety and integrity of user funds.

What role do USUAL token holders play in governance?

USUAL token holders actively participate in governance decisions, influencing the protocol’s direction, policies, and future developments.

How can I participate in governance decisions?

Engage in voting and proposal submissions as a USUAL token holder, contributing to the protocol’s governance and shaping its evolution.

Earning and Rewards

How can I earn USUAL tokens?

Earn USUAL tokens by converting LDTs into LBTs and participating in various protocol activities such as providing liquidity or staking your USUAL, aligning your interests with the protocol’s success.

What is the Alpha Yield (α-yield)?

Alpha Yield refers to the higher yield expected from USUAL token rewards compared to traditional asset yields, enhancing the attractiveness of participating in the protocol.

Partnerships and Integration

Who are Usual Protocol's partners?

Usual collaborates with various financial and blockchain entities to enhance protocol functionality, offering users a comprehensive and integrated financial ecosystem.

How can I use my Usual Assets with partners?

Spend and utilize your Usual Assets through integrations with our network of partners, facilitating seamless transactions and expanding usability.

What are the future plans for asset integration?

Governance decisions will guide the addition of new assets, continuously expanding the protocol’s capabilities and diversity to meet user needs.

Addressing Current Issues

How does Usual address current issues in the stablecoin market?

Usual addresses fundamental challenges by blending Real World Assets (RWAs) with decentralized governance, ensuring transparency, scalability, and equitable risk-reward distribution.

What actions is Usual taking to promote transparency and fairness?

Usual promotes transparency by openly disclosing collateral and guaranteeing that all tokens are backed 1:1 with the underlying assets, ensuring fairness and trust.

How can Usual scale?

Usual integrates liquidity from RWAs and incentivizes new liquidity, ensuring the protocol can scale efficiently and support extensive growth within the DeFi ecosystem.

Troubleshooting and Support

What should I do if I encounter an issue?

Refer to our troubleshooting guide or contact support through our official channels for prompt assistance with any issues.

How can I contact Usual Protocol support?

Reach out via our support channels, including email and community forums, for quick and effective assistance.

Where can I find the latest updates and announcements?

Stay informed through our official communication channels, including our website, social media, and community platforms.

Feedback and Community

How can I provide feedback about the protocol?

Submit feedback through our official channels and community forums, helping us improve the protocol based on user experiences and suggestions.

How can I get involved with the Usual community?

Join community discussions, participate in events, and engage with initiatives to be an active and influential member of the Usual community.

What are the benefits of joining the Usual Pioneer Program?

Gain early access to features, exclusive opportunities, earn rewards and play a crucial role in the development and success of the protocol by joining the Pioneer Program.

Additional Information

How much capital did Usual raise during its initial seed fundraising?

Usual Labs raised $7 million during its seed fundraising, supporting the development and launch of our innovative stablecoin and other protocol features.

How can I join as an early backer?

Early backers can contribute to Total Value Locked (TVL) during the private phase with a minimum of 100K TVL. Contact us for more information and to get involved.

Are there open-source components of Usual's technology, and how can developers contribute?

Usual welcomes developer contributions. Opportunities for development and collaboration are listed on our homepage, encouraging global participation in enhancing the protocol.

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