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$USUAL

This morning (07:00 AM UTC), the Usual protocol experienced a massive USD0 sell-off triggered by a single whale’s trade on the secondary market, which raised doubts about the USD0 peg. USD0 briefly dipped to $0.99 before re-pegging to $1 within a few seconds, initially with some bps deviation due to constant sell-offs, and then fully re-pegging after a few hours.

Strong peg over time
Historically, the USD0 peg has remained one of the strongest on the market, which can be verified by anyone. FDUSD, PYUSD, or USDe often trade a few bps below their $1 peg more frequently than USD0.

Redeemable 1:1 collateral
USD0 is always redeemable on a 1:1 basis for its underlying collateral, ensuring solvency for the Usual protocol. This redemption is handled via a smart contract, currently accessible to any whitelisted entity. Our ultimate goal is to make it fully permissionless, but we’re conducting extensive audits before granting open collateral access.

Robust secondary liquidity
The secondary liquidity of the collateral relies on tokenized RWA issuers. Usual strives for the most liquid collateral—hence the choice of USYC. We’re also diversifying with M by M^0 (already implemented), USDTB from Ethena, BlackRock BUIDL by Securitize, OUSG by Ondo, and more. This diversified approach ensures multiple exit routes and optimal liquidity. Currently, all USD0 can be redeemed on a T+0 basis, supported by short-term money market instruments with high daily liquidity.

Despite these pressures, the Usual infrastructure and model have proven solid; the peg is back to normal, and there’s now plenty of instant liquidity available for arbitrage.

Overall, this was our first major stress test of the USD0 peg, with more redemptions than the entire TVL of GHO in a few hours—yet it was business as Usual. We will continue refining our processes to be even more efficient, and we have many exciting updates on the way.

Usual remains strong and will stay.