$USUAL UIP-9: Align incentives through locking USUALx, token buybacks, and revenue stream reforms.

Context

  • Market power & finance: Usual is one of the leading income-generating protocols in its field with a TVL of approximately 650 million USD, annual revenue of 25 million USD, and a reserve fund worth 25 million USD.

  • Price discrepancy: Although generating about 20% of Circle's net profit, USUAL only trades at about 0.1% of Circle's market cap.

  • Innovation & vision: Usual is one of the first protocols to generate real income on-chain for token holders; a 6-month pilot program of 'open distribution' (which has distributed over 15 million USD) shows that simple distribution is not enough to align incentives with long-term value creation.

Goals

Restructure Usual's tokenomics model to align long-term incentives by linking rewards to the protocol's real revenue and user commitment. Specifically:

  • Launch the USUAL buyback program with USD0 (no new investment capital used), helping to withdraw tokens from circulation.

  • Introduce a tiered USUALx locking mechanism (1 / 3 / 6 / 12 months) with a gradually increasing revenue sharing factor according to the lock duration.

  • Gradually reduce the issuance rate of the 'Gamma' token to decrease token supply inflation.

  • Add protective measures against delta-neutral farming activities to maintain genuine staking demand.

  • Transfer income to holders through treasury accumulation, regular buyback programs, and USD0 distribution based on token locking.

Main mechanism

Buyback USUAL

  • 70% of the protocol's revenue (USD0) will be used to buy back USUAL on the open market and accumulate in the treasury.

  • The initial phase will be conducted manually; it will then transition to an automated smart contract once successfully validated.

  • The buyback tokens will be transferred to the ecosystem reserve fund, helping to reduce the circulating token supply and support the price.

Lock USUALx & Revenue Sharing

  • Fixed lock period: 1 / 3 / 6 / 12 months.

  • Increase APR (annual percentage rate): corresponding to 1× / 2× / 4× / 8×, proportional to the lock duration.

  • Only locked USUALx will receive the USD0 revenue share; unlocked USUALx will only receive the basic token issuance.

    Issuance Reform ('Reduce Gamma')

  • Gradually reduce the issuance rate of USUAL tokens ('Airdrop Catch-up').

  • Gradually eliminate high issuance subsidies, replacing them with revenue-based rewards.

Expected Impact

  • Holders will receive USD0 cash flow, higher yields, and stronger governance rights, all funded by real income.

  • Market value will have substantial support from the revenue-based buyback program.

  • The community is heard: about 90% support token locking, 76% support token buybacks, 67% want to limit neutral farming activities.

  • Position Usual for sustainable growth, based on a solid foundation while maintaining the core revenue-sharing model on-chain.