A similar situation to what happened with the Terra protocol in 2022 occurred with the Usual altcoin protocol this time. Massive sales from a single whale wallet led to price instability. Details are as follows...
Usual Protocol Creates Volatility in Altcoin Market with Sales
This morning, a significant sell-off of the Usual protocol’s USD0 stablecoin took place. This sell-off was triggered by a single whale trading on the secondary market. The massive sell-off has raised some doubts about the stability of the USD0. The USD0 briefly fell below $1, hitting $0.99. However, after the sell-off, the stablecoin quickly returned to $1. Although there was a small initial fluctuation, the USD0 regained a stable value within a few hours.
USD0 is known as one of the most reliable stablecoins on the market. Other stablecoins, such as FDUSD, PYUSD, and USDe, are often traded a few basis points (bps) below their $1 peg. However, USD0’s consistent performance can be easily verified by users. USD0 can always be converted into collateral at a 1:1 ratio, reinforcing the reliability of the Usual protocol. This transaction is accessible to whitelisted individuals or institutions and is carried out through smart contracts. While the ultimate goal is to make collateral access completely permissionless, extensive audits are conducted before moving to this stage.
The USD0 stablecoin is backed by secondary liquidity based on real world assets (RWA). The Usual protocol prefers collateral with the highest liquidity and diversifies with various assets by choosing USYC accordingly. Current collateral includes M by M^0, USDTB from Ethena, BlackRock BUIDL from Securitize, and OUSG from Ondo. This diversity allows for the preservation of liquidity and the increase of alternative exit routes. In addition, the USD0 stablecoin can be easily converted back according to the T+0 (same day) principle.
USD0 Proves Its Stable Value
Today’s event was the first major stress test for the USD0 peg. More trading volume was traded in a matter of hours than the total locked value (TVL) of GHO. However, despite all this pressure, the Usual protocol continued to operate successfully. The Usual team states that they are always open to liquidity enhancement suggestions and collaborations. Stability of the system remains the primary goal, and it is emphasized that exciting updates will be shared with users soon.
Usual Coin is a remarkable project that combines blockchain technology with a user-centric approach. Offering flexibility to meet the needs of both individual users and businesses, this platform appeals to a wide target audience. This aims to increase the adoption rate of Usual Coin, ensuring both the growth of the platform and its long-term success.