CoinVoice has learned that Usual stated on social media that at 5 PM Beijing time yesterday, the Usual protocol experienced a large-scale USD0 sell-off triggered by a whale trading in the secondary market. This incident raised questions about USD0's ability to maintain its peg to 1 dollar. USD0 briefly dropped to 0.99 dollars, then returned to the 1 dollar peg point within seconds. Although there was an initial deviation of several basis points (bps) due to the ongoing sell-off, it fully restored its peg after a few hours.
USD0 can always be redeemed for its underlying collateral assets at a 1:1 ratio, ensuring the solvency of the Usual protocol. Currently, all USD0 can be redeemed on a T+0 basis and are supported by highly liquid short-term money market instruments.
The peg has returned to normal, and there is a large amount of instant liquidity available for arbitrageurs in the market. This event was the first significant stress test of USD0's peg capability, with redemption volumes exceeding the entire TVL (total value locked) of GHO within hours, yet the protocol continued to operate as usual. Processes will continue to be optimized for efficiency, and many exciting updates are forthcoming. [Original link]