TL;DR

• Long-Term Vision: Anchored in a four-year framework, USD0++ ensures user alignment with protocol stability, incentivizing enduring participation and predictable revenue flows. 

• USUAL Rock Solid Value: This new phase delivers enhanced certainty to USUALx holders, offering a token backed by guaranteed 4-year revenue streams. These revenues are set to begin distribution no later than February 1, 2025, ensuring long-term value and reliability. USUAL now benefits from rock-solid fundamentals, backed by projected & solid cash flows. At the current price, it offers a future USD0 yield exceeding +60% APY with distributions starting no later than February 1, 2025.

• Resilience Against Volatility: Dual-path primary exits for USD0++ with 0.87 USD0 floor price via USUAL dAPP and 1:1 Early Unstaking available early next week.

• The Early Unstaking feature, which allows for the redemption of USD0++ for USD0 at a 1:1 ratio by burning USUAL tokens, will be available in the Dapp early next week.

• USD0++ remains fully backed by USD0, which is 100% collateralized by T-Bills. Yields remain unaffected, and its fundamentals are unchanged.

• Revenue-Driven Flywheel Effect: Revenue generated from the floor mechanism or burned through early unstaking strengthens the USUAL token, which in turn enhances USD0++ yields. This dynamic drives adoption and expands TVL, creating a self-sustaining growth cycle.

• DeFi Integration: Upcoming integrations (e.g., Morpho market, new vaults) and products (e.g., ETH0) broaden USD0++ utility and ecosystem reach.

  
  

• Highly leveraged positions on the USD0++/USDC Chainlink Oracle Morpho market are encouraged to increase their health factor for maximum security during this period of volatility, where arbitrage bots may not yet efficiently maintain the floor price.

• Other Morpho markets with hardcoded prices are safe and will be able to migrate to new markets with similar non-liquidatable properties. The largest USD0++/USDC pool (hardcoded at 1:1) will be able to migrate to a new market on the 01.10.2025 10PM UTC.

• Bad Debt Insurance: The DAO will cover any potential bad debt in non-migrable markets up to the current amount.

Introduction

In recent months, Usual has introduced an innovative stablecoin protocol that unifies liquidity, resilience, and fair incentives. It remains focused on sustainability and long-term impact, challenging conventional approaches in both traditional finance and DeFi.

The protocol now enters a pivotal maturation phase, poised to drive substantial ecosystem growth while reaffirming its core vision: positioning USD0++ as a dependable, enduring asset backed by real revenue streams. Designed with a forward-looking, four-year framework, USD0++ has consistently demonstrated robustness and adaptability to evolving market conditions.

This long-term approach secures both the protocol and the broader USUAL ecosystem, while fostering continued growth. By leveraging a cohesive system designed to thrive in a decentralized economy, Usual is positioned to create lasting value and cultivate trust among all participants.

The 4-Year Vision

A Bond-Like Approach

USD0++ as a LST functions like a “4-year bond” with a guaranteed 1:1 principal in USD0, distributing yields via USUAL token rewards. Unlike centralized stablecoins (where the issuer quietly accrues interest), Usual disrupts the norm by sharing future yields with its users through USUAL token rewards, creating an innovative and transparent value-sharing mechanism. By tying yields to the performance of USUAL token rewards over the 4-year period, USD0++ maintains its intrinsic value of 1 USD, while being able to offer USUAL rewards that are competitive within "risk-free rate" benchmarks.

Create Long-Term Commitment Through Aligned Incentives

Anchoring USD0++ over a four-years horizon deters short-term yield farming, ensuring a stronger and more enduring TVL. A strategic approach that benefits both users and the protocol itself:

• For USD0++ users, the commitment to USD0++ comes with consistent and attractive yields, making long-term participation rewarding.

• For USUAL holders, the insurance of strong value and sustainable decentralized ownership tokens is backed by real revenues.

• For the protocol, this creates a foundation of stability and predictable revenue streams, critical for sustaining and growing its ecosystem and long term commitments.

This alignment between user incentives and protocol health integrates seamlessly with Usual’s revenue switch mechanism. A portion of the protocol’s income is directed back into USUAL, reinforcing its utility, value, and governance role. This closed-loop dynamic creates a self-sustaining protocol that rewards long-term participation and strengthens over time the intrinsic worth of USD0++.

An iterative price discovery process

1. Early Phase: No Floor (First Four Months)

USD0++ launched with no floor during the pills campaign, enabling the community to test the protocol’s fundamentals and build an initial liquidity base. Participants could freely mint and trade USD0++, with the DAO being the only entity with redemption rights. This phase confirmed a strong 1 USD peg and validated protocol’s design.

2. Grace Period

Ahead of the pre-market Binance phase, an unconditional primary-market exit at 1:1 was introduced to provide additional liquidity assurance. Meanwhile, our team developed a mechanism enabling an early 1:1 exit, with users forfeiting a portion of future rewards, dynamically adjusted based on supply and demand.

3. Final Transition: Dual Exit Options

The protocol is entering a new phase providing a flexible dual-path for users requiring immediate liquidity, while rewarding long-term participants with full benefits:

• Conditional Exit: 1:1 redemption requiring forfeiture of a portion of accrued yields. This “Early Unstaking” mechanism is scheduled for release early next week.

• Unconditional Exit: Redemption at a floor price, currently set at 0.87:1, and gradually converging to 1 USD over time. An alternative for users who prefer to retain their upfront rewards.

Unlike veToken lock mechanisms, this model has been chosen to maintain constant and unlimited liquidity, a critical feature for the protocol’s sustainability and seamless integration with other ecosystems.

This approach aligns with the protocol’s core principles, as the Usual DAO captures the difference between exit values, effectively securing four years of projected revenues. These revenues further enhance the value of USUAL, enabling the protocol to sustain its linear distribution model while supporting long-term growth and stability.

The Rationale Behind the Final Phase

USD0++ Yields over Risk-Free Rates

As long as USD0++ yields match or exceed standard risk-free rates, holding until maturity remains more profitable than selling below 1 USD. Historically, USD0++ has consistently traded at or above its intrinsic value.

Revenue Switch: Boosting Value and Yields

With the upcoming revenue switch, USUAL’s value and USD0++ yields will strengthen, ensuring that any rational actor recognizes the inherent value of holding, as selling a claim worth at least 1 USD for less would be economically irrational. This highlights the protocol’s resilience and robust design.

Reinforcing Liquidity, Minimizing Volatility

Transitions may cause short-term fluctuations, but the protocol’s design—bolstered by vault Ethena, new DeFi integrations, and ETH0—helps maintain demand for USD0++. Enabling two exit routes (conditional vs. unconditional) offers stability and prevent excessive sell pressure, keeping the peg intact.

Strengthening Value Through the Flywheel Effect

USUAL’s Growing Worth

The flywheel effect starts with USUAL, a token underpinned by four years of predictable revenue flows to USUALx holder, granting it economic value. As the value of USUAL strengthens, the yields distributed to USD0++ holders become increasingly attractive. This, in turn, incentivizes greater participation and drives the expansion of TVL, creating a virtuous cycle of growth and stability for the protocol.

The Organic Peg of USD0++

This growth loop stabilizes USD0++ around—or above—its 1 USD peg as the market recognizes steady flow of rewards. Meanwhile, new users drawn by these competitive yields bolster the protocol’s treasury, reinforcing its sustainability and long-term resilience.

Constant Growth

In this scenario, each player’s interest converges around growing the protocol:

1. The Protocol gives the ability for users to have an early exit mechanism from the 4-year bond, thus opening the possibility of higher TVL and bigger revenues.

2. USUAL Holders enjoy enhanced upside as the flywheel turns and constant cashflow thanks to the revenue switch.

3. USD0++ Users secure above-market returns, during bear and bull markets due to the extrinsic source of the yield and due to the diversification of his utilities.

The Path Forward

Expanding Integrations

With the final model now in place, Usual is ready to push USD0++ toward widespread adoption. Key initiatives include:

• New Morpho “Unliquidable” market: Launching a Morpho "unliquidable" market for USD0++/USDC tomorrow, based on the floor price and with an LLTV of 96.5%. This allows users to migrate positions from the unsustainable 1:1 hardcoded vault. Deploying also a Morpho market for the USD0/USD0++ LP in the coming days, further strengthening liquidity options.

• DeFi Integrations: Integrating USD0++ into major DeFi protocols & automating yield strategies through new vaults, such as the Ethena USD0++ sUSDe yield.

• New Products: Launching ETH0 and other innovative financial tools in the coming months to diversify offerings and expand the ecosystem.

Roadmap and mechanism

This is far from being the last feature the Usual protocol will implement to strengthen the stability of USD0++ and its other components. Contributors are currently developing a PSM logic designed to act as a buffer during periods of volatility—alongside tranches and various other innovations. In general, the coming months will introduce a range of new mechanics and improvements to the protocol, which we will detail in a forthcoming article.

Conclusion

Usual’s transition to its final phase is not a mere technical update; it is the culmination of a carefully orchestrated model built around a 4-year horizon, transparent rewards, and sustained growth. We have refined USD0++ from an initial no-floor period, through an unconditional 1:1 redemption phase, into a system that leverages both a conditional exit at par and an unconditional floor to ensure flexibility and solidity.

Backed by an active revenue switch, a robust flywheel linking USUAL and USD0++, and a host of upcoming features, Usual is set to deliver on its promise of a truly sustainable stablecoin. Every part of this design—from locking tokens for four years to sharing yields with the community—aims to create a stable, high-value environment that consistently outperforms basic risk-free rates.

With the protocol’s final structure now in place, Usual stands ready to cultivate a next-generation ecosystem, bringing trust, sustainability, and rewarding opportunities to everyone involved.

Resources

Research Document