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News

Usual Protocol USD0 Will Be Stabilized With New Floor Price Mechanism

2 mins mins

Key Points:

  • Usual Protocol introduces a 1:1 early redemption feature for USD0++ users.
  • Weekly revenue distributions, totalling approximately $5 million per month, will begin next week for USUALx holders, paid in Usual Protocol USD0.
Usual Protocol has announced two major changes in light of user concerns around the USD0++ floor price mechanism.
Usual Protocol USD0 Will Be Stabilized With New Floor Price Mechanism

Read more: Ripple Stablecoin RLUSD Gets Boost in DeFi Usability With Chainlink Support 

New Fine-Tuned Features to Stabilize Usual Protocol USD0

The move is targeted at increasing confidence among users of the protocol for long-term viability. Among them is the introduction of 1:1 early redemption, which is going live next week. Such a feature means that users may redeem their staked USD0++ at the ratio of 1:1 after letting some accrued rewards be dropped for a certain period, possibly up to six months.

The protocol is accelerating its revenue distribution to USUALx holders, which will now be weekly starting next week. That is around $5 million each month, to be distributed directly to wallets holding standalone USUALx tokens as Usual Protocol USD0.

These initiatives demonstrate the economic value of USUAL and balance short-term users selling their daily rewards against long-term investors holding USUALx for its intrinsic value.

Novel Dual Exit Mechanisms Improve USD0++ Protocol Sustainability

USD0++ is the staked version of the Usual Protocol USD0, a dollar-pegged stablecoin collateralized by real-world assets such as US Treasury bills. As mentioned, USD0++ provides yield through the emission of USUAL tokens but requires a four-year lock-up period in exchange. Early redemption results in penalties; hence, liquidity is less flexible.

This set of updates comes after a significant protocol overhaul on January 9 that introduced dual exit mechanisms to enhance the long-term stability of Usual Protocol USD0. These mechanisms, which offer conditional and unconditional exits, respectively, have seen users working through shifts in redemption options and revised floor price guidelines.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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Avatar of Harold

Harold

11 January 2025, 02:57:00 GMT +0000

With a passion for untangling the complexities of the financial world, I’ve spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. “The financial markets are a fascinating puzzle,” I often say, “and I love helping people make sense of them.” That’s what drives me to bring clear and insightful financial journalism to the readers of Coincu.