Usual Protocol Primer

What is the Usual protocol about? (ELI5 version)

Usual is a new kind of stablecoin protocol designed to give users more control and rewards compared to traditional stablecoins like USDC or USDT. It creates a better system where you, as a user, not only benefit from using the stablecoin but also get ownership in the protocol itself.

Why was Usual created?

In the current crypto landscape, stablecoin issuers (like Tether and Circle) make a lot of money, but users don’t benefit from this wealth. Usual flips this model by redistributing profits and ownership to users. This makes it a fairer system, where users who hold or use USD0 and $USUAL actually benefit from the protocol’s success.

The core elements of Usual

USD0

This is Usual’s stablecoin. It's pegged to the US dollar and backed by real world assets (RWA) like US Treasury Bills (T-Bills). Unlike other stablecoins that might have hidden risks (like depending on banks), USD0 is fully backed by super-safe assets (T-Bills), making it more secure. It’s also designed to be permissionless and easily integrated into DeFi (Decentralized Finance) ecosystems.

Key features of USD0:

• Fully backed by RWA T-Bills, making it stable and secure

• Completely transparent—anyone can verify the reserves backing USD0

• Works seamlessly in DeFi, allowing for easy trading, lending, or using it as collateral

USD0++

USD0++ is a "staked" version of USD0. If you want to earn more from your USD0, you can stake it in USD0++ for up to four years. While locked, USD0++ still remains liquid and tradable, and it earns extra rewards in the form of yield. This yield can be paid out in Usual’s governance token, $USUAL ensuring you get a return on your staked assets.

Key features of USD0++:

• Staked for 4 years but still tradable in DeFi

• Earns daily yield, paid in $USUAL tokens

• Offers a minimum guaranteed yield, making it attractive for users seeking stable returns

ETH0

ETH0 is a synthetic ETH asset fully backed by Lido’s wstETH and issued by the Usual protocol. It allows institutional investors and crypto-native whales to maintain directional ETH exposure while capturing significantly higher yields than conventional staking or restaking.

Powered by the same architecture that underpins Usual’s stablecoin (backed by tokenized T-bills), ETH0 holders receive USUAL tokens, allowing them to outperform the underlying yield.

Key features of USD0++:

• Retain full ETH exposure (1:1 peg to ETH)

• Earn yield through USUAL distributions

• Redeem their position anytime for wstETH

USUAL

USUAL is Usual’s governance token, but it’s much more than just a token to vote with. It represents ownership of the protocol, meaning users benefit from the protocol’s growth and revenue. The more USD0 is used, the more valuable USUAL becomes. It also gives users a say in how the protocol is run, including decisions on collateral types and rewards distribution.

Key features of USUAL:

• Represents ownership in the protocol’s revenue

• The token supply grows slowly over time, ensuring it becomes more valuable as the protocol grows

• USUAL holders can stake their tokens to earn more USUAL and participate in governance

• USUAL can also be used to unlock staked USD0++ before the 4-year period ends

How does it work?

The Usual protocol lets users swap USDC for USD0, which can then be staked to earn more USD0 (called USD0++). By doing this, users can eventually earn USUAL, the governance token of the protocol. Behind the scenes, a system gathers liquidity from USDC deposits and invests it in on-chain Treasury bills. All the profits go to the protocol’s treasury, which is controlled by USUAL holders. USUAL is distributed in a disinflationary manner, with 90% of protocol revenue supporting operations, stakers, and liquidity providers, while 10% goes to USUAL holders.