This proposal introduces U0R (Usual Zero Rate Vault) as eligible collateral for USD0 on Ethereum mainnet. UIP-16 is a technical, preparatory proposal to test and validate the system ahead of a broader infrastructure proposal.
Usual's governance process deploys upgrades in clearly defined stages. UIP-16 follows this approach.
This proposal aims to add U0R (Usual Zero Rate Vault) as eligible collateral for USD0 on Ethereum mainnet. Its objective is strictly technical and preparatory: UIP-16 does not introduce a new product at this stage and does not finalize a broader infrastructure transition. It represents an intermediate step.
As a reminder, following the DAO vote to reduce USUAL inflation during UIP-11, governance set the USL rate to 0% and stopped USUAL emissions for bUSD0 deposited as USL collateral.
We are therefore proposing a technical UIP to introduce U0R as new USD0 collateral, via a dedicated infrastructure, deployed alongside USL: the Usual Zero Rate Module (UZR), with an explicit property: a 0% rate.
UZR will coexist with the current USL on Euler: nothing is replaced, nothing is imposed. Users will be able to choose to remain on the current system or to migrate.
Why this UIP
This technical UIP precedes a forthcoming UIP that will propose the complete new infrastructure.
It is necessary to unlock essential tests (security, integrations, on-chain behavior, user flows) before a broader deployment.
The objective is to reduce risk and validate technical assumptions before submitting the final migration and target architecture to governance.
Before submitting a complete infrastructure proposal, the protocol must validate the behavior of this configuration under real conditions. UIP-16 opens this testing phase by authorizing U0R as eligible collateral for USD0.
The proposed change does not modify USD0's risk framework, monetary policy, or collateral philosophy. It allows testing, in a controlled manner, collateral flows, accounting, and integrations, before a separate proposal that will detail the complete infrastructure design.
In this sense, UIP-16 is a prerequisite: it creates the necessary conditions to collect on-chain data, validate assumptions, and reduce risk, before requesting DAO approval for a broader architectural change.
A detailed technical description of the future infrastructure will be submitted to governance soon.
