Coinspeaker Usual Labs’ USD0++ Falls to $0.92 as Ecosystem Questions New Redemption Model
Usual Labs, which has carved a niche in the competitive stablecoin market with its unique approach to digital currency, is currently facing backlash. The startup’s staked token USD0++ has plummeted to $0.92.
This follows a major change in its redemption structure, as shared in a recent X post. This shift has shifted investor confidence, raising concerns about the future stability of the USD0 stablecoin ecosystem.
What Went Wrong with USD0++?
Usual Labs has made major changes to its USD0++ system, turning what was once a predictable investment tool into something far riskier. Previously, users could stake their funds and earn rewards in Usual’s native token USUAL.
Traders could withdraw their funds anytime at a guaranteed 1:1 rate with USD0. The system had a simplified and reliable model before now. The new changes, however, force users to make difficult decisions. They can exchange USD0++ for USD0 at the same rate to withdraw funds.
⚡️ USUAL, Stronger Than Ever
4 years guaranteed revenues backing USUALx. Enhanced USD0++ yields.
Early unstaking as planned. Floor price updated for stability.
USUAL’s revenues are now secured & programmed.
🔗 Important details—read carefully👇https://t.co/gdKhfOGXDu
— Usual (@usualmoney) January 9, 2025
However, users must give up part of their rewards or cash out at a lower price. The starting price is $0.87, gradually increasing to $1 over four years. These options have created uncertainty, pushing users between locking their funds for years or exiting at a loss.
When investors saw the new rules, many chose to cash out rather than take their chances with USD0++. This sparked a mass sell-off, destabilizing USD0++’s largest liquidity pool on Curve, a key trading platform.
The imbalance in the pool caused the token’s value to slide below $1, making it clear that confidence in USD0++ had eroded. This overhaul has shaken trust in the system. The significant drop in the price of USD0++ reflects the higher risks in the new setup.
Usual Labs’ Silence Adds to the Uncertainty
Trust and liquidity are essential for a system like USD0++ to thrive, but recent changes have undermined both. Users who once saw USD0++ as a safe, high-yield option now question its value.
Meanwhile, the promise of locking funds for four years to earn rewards feels less appealing when the exit options are so unfavorable. Despite the turmoil, Usual Labs has yet to address the situation publicly.
This silence is surprising, especially for a company that raised $10 million in funding and secured a $75 million Total Value Locked (TVL) for its ecosystem. Backers like Kraken Ventures, Starkware, and IOSG Ventures believe in Usual’s vision.
However, the current instability raises serious concerns about its long-term viability. Unless Usual Labs steps in with clear communication and a plan to restore confidence, its ambitious experiment might be short-lived.
As reported by Coinspeaker, several crypto projects have faced setbacks after changing their core mechanics, similar to the situation with USD0++. These projects include but are not limited to TerraUSD (UST), Iron Finance, and Balancer.
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Usual Labs’ USD0++ Falls to $0.92 as Ecosystem Questions New Redemption Model
