USUALx is the staked version of USUAL, unlocking governance power, protocol rewards, and treasury revenue. This guide breaks down how staking works, its benefits, and how USUALx holders shape Usual’s future while earning sustainable yield.
In the Usual ecosystem, USUALx is more than just a staked token—it’s the key to both governance power and sustainable rewards. By staking USUAL, users receive USUALx, a liquid staked token (LST) that accrues rewards automatically while remaining fully transferable.
Staking transforms USUAL into a yield-generating asset, granting access to daily emissions, protocol fees, and treasury revenue. At the same time, it empowers holders with governance rights, letting them shape Usual’s decisions and future direction.
Unlike traditional staking models, USUALx doesn’t require lock-ups. Instead, rewards grow over time, and the protocol redistributes fees to long-term stakers. With its auto-compounding design and built-in incentives, USUALx aligns participation with the protocol’s long-term vision.
In the sections ahead, we’ll break down how USUALx works, its reward mechanics, and why it plays a crucial role in Usual’s ecosystem.
How Staking Works
Staking in Usual is designed to be simple, flexible, and rewarding. Instead of locking up tokens for a fixed period, users can stake USUAL at any time to receive USUALx, a liquid representation of their staked position.
From USUAL to USUALx (and back)
The process is straightforward: when users stake USUAL, they receive USUALx in return. This token acts as a vault share, representing a portion of the staking pool rather than a fixed 1:1 balance.
Unstaking is just as simple: users can convert USUALx back into USUAL at any time. However, the unstaking process comes with a 10% fee, designed to discourage short-term farming and strengthen the reward system for long-term participants.
Since USUALx represents a share of the staking pool, rather than a fixed amount of USUAL, it means that while a user’s USUALx balance might not increase numerically, its value relative to USUAL does, thanks to auto-compounding. This design ensures that all staking rewards are seamlessly reinvested, optimizing yield for committed participants.
Alternative to Unstaking: Swapping
There is another way to exit a staked position: swapping USUALx for USUAL on a decentralized exchange (DEX). This allows users to “avoid” the unstaking fee, as they are exchanging rather than unstaking, though the swap rate depends on market liquidity and demand.
To optimize the process, the Usual dApp automatically routes unstaking requests to either:
The primary market (unstaking with the 10% fee), or
The secondary market (DEX swap, which may offer a better rate).
If the swap rate is more favorable than unstaking, the dApp will automatically select it and notify users via a banner on the unstaking page.
The Rewards of USUALx
Holding USUALx unlocks multiple revenue streams within the Usual ecosystem. Stakers benefit from a combination of USUAL emissions, protocol fees, and direct treasury revenue.
Daily USUAL emissions: USUALx holders receive 10% of all USUAL emissions distributed by the protocol. This means that as new USUAL is emitted, a fixed share is allocated to USUALx stakers, ensuring continuous rewards for those committed to the ecosystem.
Protocol Fees: Beyond emissions, USUALx holders also earn a cut of the fees generated within Usual. Specifically, 33.33% of all USUAL-denominated protocol fees—including unstaking fees and early redemption fees from USD0++—are redistributed to USUALx stakers.
Revenue Switch: Up to 100% of Usual’s protocol revenue is distributed weekly to USUALx holders in USD0, meaning stakers receive a direct share of the protocol’s earnings. This revenue comes from interest generated on the collateral backing USD0’s supply.
Revenue Switch Eligibility
Revenue Switch distributions are based on a time-weighted system, ensuring fair allocation based on staking duration and balance. Rewards are determined by comparing two values: your time-weighted average balance over the epoch and a prerequisite balance snapshot taken just before the epoch starts (00:00 UTC+0). If the prerequisite balance is lower than the average balance, it is used; otherwise, the average balance applies.
USUALx and Governance
Beyond its role as a yield-generating asset, USUALx is a cornerstone of governance within the Usual ecosystem. Staked USUAL isn’t just about rewards—it represents voting power in the Usual DAO, giving holders a say in critical protocol decisions.
USUALx holders help shape the future of Usual by voting on governance proposals that impact:
Protocol parameters (such as staking fees, redemption conditions, and reward distributions).
Treasury management (allocating funds, deciding on revenue use etc.).
New asset onboarding (e.g. choosing which collateral can back USD0).
As Usual progresses toward full decentralization, USUALx holders will continue to play a pivotal role in steering the protocol’s strategic direction.
Current Governance Breakdown
Governance power in Usual is currently distributed across three key stakeholders as part of a proto-governance framework, subject to future refinement:
40% USUALx holders
40% USUAL* holders (another governance-weighted token)
20% USD0++ holders (at least during early-stage governance)
This structure ensures that decision-making authority is balanced between different user groups, aligning incentives across the ecosystem. Over time, governance mechanisms will continue to evolve, giving active and long-term participants greater influence over protocol decisions.
Conclusion
USUALx is a core pillar of Usual, combining governance power, yield, and direct protocol revenue access. It aligns long-term participation incentives while maintaining liquidity, giving users flexibility to stake, earn, and exit as needed.
With auto-compounding rewards, protocol fee distribution, and the live Revenue Switch, USUALx remains central to Usual’s value distribution model. As the ecosystem grows, its role in governance and rewards will continue to shape the protocol’s future.
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