114/4/30 "Cryptocurrency Analysis" USUAL

Usual Labs and its stablecoin product USD0++ are facing multiple negative factors, significantly impacting their market reputation and user trust.

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⚠️ Major Negative Factors

1. Sudden Change in USD0++ Exchange Mechanism

In January 2025, Usual Labs modified the exchange rules for USD0++ without adequate notice, canceling the original 1:1 exchange mechanism. Users now need to choose:  

• Conditional Exit: Can be exchanged at a 1:1 ratio for USD0, but must forfeit part of the accumulated rewards. 

• Unconditional Exit: Exchange at the current floor price (starting at $0.87), which will gradually rise to $1 over four years. 

This change caused the price of USD0++ to drop to $0.89 at one point, triggering market panic. 

2. Lack of Transparency and Market Confusion

Usual Labs' communication methods have been criticized by users, with many investors reporting inadequate notification, leading to financial losses. Multiple DeFi applications (such as Pendle) regarded USD0++ as equivalent to USD0, resulting in liquidity issues after the price decoupled. 

3. Governance and Trust Crisis

Usual Labs' CEO Pierre Person acknowledged this incident as a "communication error," but emphasized that the underlying agreement remains solid. However, the market has raised questions about their governance transparency and user protection mechanisms, especially after implementing significant changes without adequately consulting the community. 

4. Insufficient Security Audits and Fund Transparency

According to a report by CoinLaunch, some security audit reports of Usual Labs have not been made public, and there is a lack of transparency in private fundraising allocation. Additionally, core team members lack experience working for top tech companies, which may affect the project's professionalism and credibility. 

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📉 Market Reaction and Potential Risks

• Price Volatility: The decoupling event of USD0++ has raised concerns about its stability, which may affect future capital inflows. 

• Decline in User Trust: The lack of transparency in protocol changes may lead to a decrease in user trust in Usual Labs, impacting its position in the DeFi ecosystem.

• Regulatory Risk: With increasing regulation in the stablecoin market, Usual Labs may face scrutiny from regulatory authorities if it cannot provide adequate asset support and transparency.