On the importance of economic models
$USUAL brings new innovations to token economics:
❤️ It represents 100% ownership of the protocol's income.
❤️ Holders enjoy governance rights over the treasury and protocol decisions.
❤️ Holders can also share in the future growth dividends of the protocol.
Unlike utility tokens with low circulation and high fully diluted valuation (FDV), Usual's token economics focus more on community distribution:
90% of the tokens will be allocated to the community, including users, liquidity providers, and contributors.
Only 10% is allocated to internal personnel (team and investors). Token holders will have control over the treasury and significant decisions of the protocol.
The token issuance mechanism is dynamic and directly linked to the actual revenue of the protocol.
New $USUAL is minted and distributed daily based on the protocol's revenue situation.
As the total locked value (TVL) of USD0++ grows, the issuance rate of the token will gradually slow down.
Although the official documentation claims that the token is not inflationary, in reality, the token is inflationary. The solution is to stake the token as USUALx, which can earn 10% of the total daily minted amount of the protocol.
A 10% penalty will be charged for unstaking, half of which will be rewarded to other USUALx stakers. The current annualized yield is as high as 1737%. The maximum distribution of tokens occurs during the initial airdrop phase (which I completely missed).
Over time, the token issuance rate will gradually slow down, so early participants have an advantage; the key is to enter early and anticipate the growth of TVL.
The longer the time, the more obvious the dilution effect of the token.
The good news is that the partnership with Ethena will help drive rapid growth of TVL.
💖 However, it is indeed exciting to see innovative projects like Ethena and Usual challenging stablecoins. These traditional stablecoin giants have not shared profits with users, while new projects are changing this status quo.
Now, we have two alternative options worth noting to bet on the further growth of the stablecoin market.
If I have any information incorrect, please feel free to point it out! I am still researching this protocol and, as usual, learning while documenting my understanding!
Feel free to like, share, and comment; your support is my motivation for creation! $USUAL