Usual Protocol Explained

What Usual Protocol Is 

Usual Protocol is a decentralized financial system designed to bring the value of real-world assets (RWAs) on-chain in a more transparent and equitable way.

It combines a fully-backed stablecoin, a yield-bearing liquid staking token, and a responsive governance token to create an ecosystem where users can directly benefit from the returns generated by real-world collateral.

Key Problems Usual Aims to Solve

Traditional stablecoin solutions can leave users with little upside from the protocols that earn substantial revenue, and many holders cannot directly access real-world assets. Usual targets three common pain points:

• Profit centralization: returns from asset management are often captured by a few entities rather than shared with users.
• Limited accessibility: many investors lack a clear, permissionless path to benefit from real-world assets inside DeFi.
• Opacity: it can be hard to verify how stablecoins are collateralized and managed.

The Three-Token Ecosystem

The protocol centers on three tokens that each play a specific role in the ecosystem.

1.  USD0: The RWA-Backed Stablecoin

USD0 functions as the primary unit of value in the system. It is designed to be mintable by users who provide approved collateral and is backed by fully collateralized, low-risk instruments such as short-term government securities and other liquid assets. Transparency is emphasized through verifiable collateral reporting and routine audits.

Minting and redemption options for USD0

There are two common ways to mint or redeem USD0:

• Direct minting: users deposit eligible collateral directly to mint USD0.
• Indirect minting: when users cannot hold certain collateral themselves, a community-managed mechanism can facilitate minting and distribute USD0 to them.

Collateral standards and risk controls

To preserve stability, collateral must be unlevered, highly liquid, and low risk so it can be converted quickly if needed. The protocol also maintains safeguards such as reserve buffers and an insurance fund to handle unforeseen collateral shortfalls.

2. USD0++: The Yield-Bearing Liquid Staking Token

USD0++ represents USD0 that is locked until a defined maturity date. It lets holders earn protocol rewards while still trading a liquid token on secondary markets. The design rewards long-term commitment but keeps market liquidity for stakers through a tradable instrument.

Options for early exit from USD0++

Although USD0++ is intended to stay locked to maturity, there are mechanisms that allow earlier conversion under specific conditions:

• Token burn for parity: holders can burn governance tokens to redeem USD0++ for USD0 at a 1:1 ratio in approved scenarios.
• Floor-price redemption: the community can authorize discounted redemptions set by governance.
• Emergency parity unlocking: a protocol-controlled right to unlock tokens during extreme market stress helps protect the peg and market stability.

3. USUAL: The Governance and Incentive Token

USUAL is the protocol’s governance token and a reward vehicle. Holders can participate in decision-making about collateral types, treasury allocation, and reward parameters. USUAL is designed to align incentives between users and the protocol’s long-term health.

How USUAL issuance adapts to the ecosystem

USUAL minting responds to protocol conditions rather than issuing a fixed supply at a constant rate. Key inputs include the supply of USD0++ (which can create scarcity as demand grows), interest-rate-driven revenues, and configurable variables that the community can adjust through governance.

The Path to Decentralized Governance

Usual Protocol is designed for progressive decentralization. While initially managed by a core team to ensure stability, control will be systematically transferred to a community-run DAO, empowering USUAL token holders to govern the future of the ecosystem.

Liquidity providers are encouraged to support token markets via reward programs. For example, supplying liquidity to USD0 or USUAL pools can earn additional USUAL incentives. These mechanisms help keep trading depth healthy and minimize slippage for users.

Practical Takeaways 

The Usual Protocol structures a multi-token approach to bring real-world asset exposure to DeFi in a more transparent and participatory way. USD0 offers a stable, asset-backed medium; USD0++ rewards locked commitments while remaining tradable; and USUAL aligns community incentives through governance and revenue-based issuance. Together, they aim to expand access to real-asset yield while reducing single-point profit capture.

By combining on-chain mechanisms with real-world collateral and community governance, the protocol seeks to create a more open and accountable route for investors to tap into asset-backed yield within decentralized finance. As with any financial innovation, users should understand the risks and consider professional advice before participating.