Yesterday at 7:00 AM UTC, the Usual protocol faced a significant stress test when a single whale’s trade on the secondary market triggered a large-scale USD0 sell-off.
This event briefly disrupted the USD0 peg, causing it to dip to $0.99. However, the stablecoin quickly re-pegged to $1 within seconds, albeit with minor deviations due to ongoing sell-offs. Full stabilization was achieved after a few hours, showcasing the protocol’s resilience.
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A Strong Historical Peg
The USD0 peg has consistently been one of the strongest in the market. Unlike other stablecoins like FDUSD, PYUSD, or USDe—which often trade slightly below their $1 peg—USD0 has demonstrated exceptional stability over time, a fact verifiable by market data.
1:1 Collateral Redemption
USD0 is fully redeemable on a 1:1 basis for its underlying collateral, ensuring the protocol’s solvency. These redemptions are managed via a smart contract, currently limited to whitelisted entities. Plans are underway to make the process permissionless, pending extensive audits to ensure security and reliability.
Diversified Liquidity for Stability
The protocol relies on robust secondary liquidity supported by tokenized real-world assets (RWA). Collateral includes USYC, M by M^0, USDTB from Ethena, BlackRock BUIDL by Securitize, and OUSG by Ondo, ensuring diverse and highly liquid options. All USD0 redemptions are processed on a T+0 basis, backed by short-term money market instruments with high daily liquidity.
Looking Ahead
Despite unprecedented redemption pressure that exceeded the total TVL of GHO within hours, Usual’s infrastructure proved resilient. The protocol has since restored the peg and ensured ample liquidity for arbitrage opportunities. The team remains committed to improving processes and welcomes proposals to enhance liquidity and stability. Exciting updates and features are on the horizon, reinforcing Usual’s position as a reliable stablecoin protocol.
This morning (07:00 AM UTC), the Usual protocol experienced a massive USD0 sell-off triggered by a single whale’s trade on the secondary market, which raised doubts about the USD0 peg. USD0 briefly dipped to $0.99 before re-pegging to $1 within a few seconds, initially with some…
— Usual (@usualmoney) December 31, 2024
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