USUAL and LUNA: Can “Death Spiral” Risks Be Avoided?
Friends who have experienced the last bull market inevitably think of PTSD when they see stablecoins + high yields + spiraling increases, recalling the crash of LUNA and its algorithmic stablecoin UST. However, compared to LUNA, USUAL's design has established defenses on multiple critical points:
Real Assets VS Virtual Dependencies
The failure of LUNA essentially stemmed from its stablecoin UST being entirely dependent on market demand for its peg. When the UST peg failed, LUNA was forced to attempt to restore the peg through unlimited issuance, leading to a price crash and a collapse of confidence. In contrast, both USD0 and USD0++ behind USUAL are backed by real-world assets (U.S. Treasury bonds), with clear and stable sources of income, significantly reducing the risk of a similar death spiral.
Dynamically Adjusted Inflation Model
The unlimited issuance of LUNA ultimately led to token dilution, while USUAL limits the growth of token issuance by dynamically adjusting the minting rate. As the protocol's TVL increases, the amount of $USUAL tokens corresponding to each additional dollar locked decreases, maintaining the scarcity of the tokens.
Multi-layered Yield Structure: Diversifying Single Point Risks
The sources of yield for USUAL are diversified, including not only the base yield from USD0++, but also additional earnings from minting profits, transaction fees, etc. This multi-layer yield model reduces reliance on single market conditions; even if one aspect is hindered, the protocol can still operate normally.
After analyzing the logic and risks of USUAL's high APR, one cannot help but ask: Is its growth solely reliant on internal incentives? The answer is no. USUAL is building a more open and diverse ecosystem through collaborations with other DeFi projects (such as Pendle and Ethena). This cross-protocol cooperation not only enhances the market appeal of USD0 and USD0++, but also injects external growth momentum into the protocol.