In recent days, $USUAL is one of the most controversial projects, after TRUMP. The misunderstanding regarding the operation of USD0++ has caused the project's TVL to plummet severely. However, the USUAL team's resolution through the "Early Redemption Mechanism" is quite commendable. This resolution has truly minimized the damage for investors who misunderstood USD0++. However, the project's efforts seem almost insufficient as the market continues to decline. The short-term price drop cycle of ETH is indeed a major barrier for most altcoins. Based on the panic market conditions, some KOLs deliberately create fake news to influence market waves. However, this does not weaken USUAL, but makes it stronger. So why do I think so? Let’s look at some of my personal views. In this article, I will delve into the core of the USD0++ drama.
1. USD0++: The origin of all drama
1. What is USD0++?
The fifth page of the USUAL project white paper states:
"The main product rewarded for participation in the Usual ecosystem is USD0++. This token is a Liquid Staking Token (LST) that requires users to lock USD0, Liquid Deposit Token (LDT). Users obtain USD0++ by locking their USD0 for a fixed period. During this lock-up period, users can accumulate and claim profits in USUAL while still retaining the right to fully unlock their LDT upon maturity or unlock their LDT before maturity with an additional cost."
The content above will have two main points:
USD0++ is a long-term investment product through staking USD0 for a fixed period. Note that it must be staked for a fixed period.
USD0++ is not a stablecoin, so the fact that USD0++ is pegged at a 1:1 exchange rate to USD is incorrect. Because if pegged 1:1, there will be situations where some people withdraw early and take both the principal and rewards out of the protocol, what will happen? Therefore, the project's decision to set a floor price for USD0++ at 0.92 USD at this moment is reasonable. Because there is no reason for you to withdraw assets early from a long-term investment while also taking the rewards to dump on long-term investors. This is actually to ensure DAO revenue over four years, maintain the value of USUAL, and ensure profits for USD0++.
Basically, the way the USUAL team handles this is to protect the community from individuals exploiting the USD0 staking mechanism of the project.
2. So how long is the lock-up period for USD0++?
The sixth page of the USUAL white paper states:
"Lock-up time is a fundamental mechanism in the protocol, ensuring that the issuance of USUAL is closely related to future cash flows secured. Managed by the DAO, the lock-up period is uniformly set to mature on June 30, 2028, applicable to all USD0++. Upon maturity, all locked USD0++ will automatically unlock unless before maturity, the user chooses the early withdrawal mechanism stated in Section 3.3.
This long-term commitment is an essential part to encourage sustainable participation in the ecosystem, aligning user benefits with the growth of the protocol. By locking USD0++, users will be positioned to receive USUAL, helping to redistribute both economic and governance value. This structure prevents short-term speculation, promoting long-term sustainability.
However, USD0++ still maintains flexibility through a composable and liquid design, allowing users to exit their position before maturity by selling or transferring tokens on the secondary market, ensuring continuous access and market efficiency.
This content will also have three main points:
The maturity date is June 30, 2028.
Rewards for staking USD0/USD0++ are guaranteed.
The goal is long-term investment and preventing short-term speculation.
Basically, USD0++ is a long-term investment asset, accumulating rewards in the form of USUAL tokens with a maturity date of June 30, 2028.
3. Conclusion
From the beginning, everything has been clearly written in the project's white paper. Self-research is extremely important. (dyor)
The misinformation from some KOLs about USD0++ recently has led inexperienced investors to misunderstand the project. This is a sad reality.
2. USUALX: The trump card based on the strength of the community.
1. What is USUALX?
USUALx is a token that can represent staked USUAL. It grants holders access to additional benefits, including participation in reward distribution and governance rights within the protocol. Holders of USUALx participate in the daily distribution of USUAL, which is allocated as 10% of the total USUAL issued by the protocol. This distribution mechanism provides a safeguard against the broader emission of USUAL, rewarding long-term participation in the ecosystem. USUAL tokens can be staked or unstaked at any time without mandatory lock-up periods. However, the DAO still retains the authority to apply unstaking fees, imposed as a percentage of the USUALx withdrawn. This fee mechanism prevents short-term holding behavior while reallocating the collected fees to reward and enhance the alignment of incentives for long-term stakers.
2. What is the truth behind the drama "Supply increases every day"?
Supply allocation.
Unlike most other projects, USUAL is designed so that the circulating supply will increase daily. USUAL is minted and distributed daily into various pools for use and reward in Usual.
If we look at the allocation table above, we can see that most of the supply is allocated to staking pools. This means that the majority of the supply allocated each day will go into the staking pool rather than on exchanges. And it also means that most of the supply allocated each day will be transferred to the project's long-term staking community. Thus, the circulating supply on exchanges is actually smaller than you think. Why?
What is the actual supply on exchanges?
I can see the panic mentality of inexperienced investors in managing emotions during the recent down market. Personally, managing emotions is not easy. However, with the experience I have accumulated over many years and research is the remedy to control my emotions.
At the time of writing this article, the circulating supply of USUAL is displayed by Binance as approximately 556.9 million USUAL.
However, you have forgotten one thing that USUALX is a long-term staking product of USUAL. And this means that the supply on exchanges is actually "much lower". And to support my argument, I will present the number of USUAL currently being staked at the time of writing:
The current amount of USUAL being staked is approximately 256.9 million tokens, accounting for 46.08% of the current USUAL supply, and its growth rate is very fast, showing that the USUAL community truly understands the value of USUALX. This means that the current supply on exchanges and other environments is only about 300 million USUAL.
The increasing percentage of USUAL being staked will reduce supply on exchanges, creating scarcity for USUAL in the near future. The simple rule in the law of SUPPLY - DEMAND, supply decreases while demand increases then ...
3. Conclusion
The market is always fluctuating daily and is not always increasing in price. Instead of trying to analyze peaks and troughs, we should study the core values of the project together. USUAL is a good project, however, the overall decline of the market is a barrier to development. Currently, altcoins still depend quite a bit on the trend of ETH. The Pectra upgrade is expected to bring a new breakthrough for ETH and bring altcoins into a recovery phase.
Let's wait and see the market trend in the upcoming period.
*This article is not investment advice. Please do your own research in investing. (dyor)
