Stablecoins have become a cornerstone of decentralized finance (DeFi), providing a reliable bridge between cryptocurrencies and traditional fiat currencies. However, not all stablecoins are created equal. This article compares USDT (Tether), the most widely used stablecoin, with USUAL, a revolutionary new player redefining stablecoins through decentralization and community ownership.
1. Core Concept
USDT: Tether is a centralized, fiat-backed stablecoin pegged 1:1 to USD. It is primarily designed to offer price stability for cryptocurrency traders and investors.
Usual: Usual is a decentralized stablecoin protocol that combines stability with governance rights and profit-sharing, empowering its users to control the protocol's growth and decision-making.
2. Control & Ownership
USDT: Fully controlled by Tether Limited, a centralized company that makes decisions about reserves and policies without user input. Users are dependent on the company’s transparency and governance.
Usual: Operates on a decentralized governance model through $USUAL tokens. Users directly influence decisions, including treasury management, collateral strategies, and reward distribution.
3. Transparency
USDT: Transparency has been a point of concern, as Tether has faced criticism for unclear audits and doubts about reserve backing.
Usual: Fully on-chain transparency ensures that reserves and transactions are auditable by anyone at any time. This fosters trust and accountability.
4. Collateralization and Security
USDT: Reserves include cash, bonds, and commercial paper, exposing it to fractional reserve risks linked to banks. The collapse of Silicon Valley Bank (SVB) highlighted the dangers of reliance on traditional banks.
Usual: Backed by safe, short-term U.S. Treasury Bills (T-bills), which are bankruptcy-remote and not exposed to fractional reserve banking. This structure ensures a higher level of security and stability.
5. Profit Sharing and Yield Generation
USDT: Profits earned from reserves go entirely to Tether Limited, leaving users with no yield or profit-sharing opportunities.
Usual: Profits generated by the treasury are retained within the protocol to increase the value of $USUAL tokens. Users benefit from both yield and growth exposure by staking tokens or holding them for price appreciation.
6. Governance Rights
USDT: Users have no say in Tether’s decisions. It operates as a traditional centralized entity.
Usual: Holders of $USUAL tokens participate in voting and governance, influencing decisions such as collateral management, yield strategies, and treasury allocation.
7. Utility and Incentives
USDT: Serves primarily as a transaction medium with no additional utilities or incentives.
Usual: Provides multiple utilities:
Staking Rewards: Earn passive income by staking $USUAL tokens.Voting Power: Influence key decisions in the protocol.Growth Exposure: Gain from the increasing value of the treasury.
8. Security and Stability
USDT: Depends on centralized audits and regulatory oversight, which may introduce counterparty risks.
Usual: Utilizes smart contracts and blockchain-based transparency to eliminate counterparty risks and ensure stability.
9. Scalability and Growth Model
USDT: Focused on profit maximization for its centralized entity, limiting incentives for users.
Usual: Aligns user incentives with protocol growth, creating sustainable expansion by reinvesting profits into the treasury and rewarding token holders.
10. Key Comparison Table
Final Thoughts
Both USDT and Usual offer stablecoin solutions, but they cater to different needs:
USDT is suitable for users seeking simplicity and liquidity without requiring governance rights.Usual appeals to those who want control, transparency, and profit-sharing through a decentralized ownership model.
With Usual, users not only hold a stablecoin but also become owners and decision-makers, aligning incentives for growth and creating a fairer financial ecosystem. It represents a game-changer in stablecoins, blending stability, security, and ownership—key pillars for the next generation of DeFi.
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