Bitget App
Trade smarter
Buy cryptoMarketsTradeFuturesEarnWeb3SquareMore
Trade
Spot
Buy and sell crypto with ease
Margin
Amplify your capital and maximize fund efficiency
Onchain
Going Onchain, without going Onchain!
Convert
Zero fees, no slippage
Explore
Launchhub
Gain the edge early and start winning
Copy
Copy elite trader with one click
Bots
Simple, fast, and reliable AI trading bot
Trade
USDT-M Futures
Futures settled in USDT
USDC-M Futures
Futures settled in USDC
Coin-M Futures
Futures settled in cryptocurrencies
Explore
Futures guide
A beginner-to-advanced journey in futures trading
Futures promotions
Generous rewards await
Overview
A variety of products to grow your assets
Simple Earn
Deposit and withdraw anytime to earn flexible returns with zero risk
On-chain Earn
Earn profits daily without risking principal
Structured Earn
Robust financial innovation to navigate market swings
VIP and Wealth Management
Premium services for smart wealth management
Loans
Flexible borrowing with high fund security
Stablecoin developer Usual faces backlash after changing redeem function

Stablecoin developer Usual faces backlash after changing redeem function

Crypto.NewsCrypto.News2025/01/09 16:00
By:By Denis OmelchenkoEdited by Dorian Batycka

Stablecoin developer Usual is under scrutiny after changing 1:1 redemption mechanism for USD0++, its yield-bearing staked token tied to the USD0 stablecoin.

USD0++, the staked version of the USD0 stablecoin by Usual, dropped to $0.92 — 8% below its previous redemption value — after new early exit options triggered a sell-off and disrupted its largest Curve pool.

USD0++ is not a stablecoin. It is a staked version of USD0, designed to lock funds for four years while earning USUAL tokens as rewards. Previously, USD0++ could be redeemed 1:1 with USD0, but now users must choose between two exit options: a conditional exit, redeeming 1:1 but forfeiting part of accrued rewards, or an unconditional exit at a floor price starting at $0.87 and gradually increasing to $1 over four years.

So @usualmoney team has been claiming for a few weeks that USD0++ was redeemable for 1:1 USD0 so everything was chill.

Today, they stopped the 1:1 redeem function without any prior announcement to trap farmers and keep their TVL.

USD0++ is now trading at $0.92. Please send this… pic.twitter.com/aZNArIQoy0

— CBB (@Cbb0fe) January 10, 2025

The changes have turned USD0++ into a mix of a bond and a yield farming tool. While high-risk users can stake USD0 into USD0++ to farm USUAL tokens with high yields, more conservative holders can lock funds for four years to earn a fixed 4% annual yield.

As a result, the system’s design creates trade-offs. USD0 holders sacrifice yield for stability, while USD0++ holders lock funds and hope USUAL rewards offset their lost yield, and USUAL stakers capture yields from others while betting on the token’s price appreciation.

The recent updates have made USD0++ riskier and less appealing, with long lock-up periods and changing redemption rules making it less attractive than more liquid options, which led to a wave of selling as traders and yield farmers tried to exit, causing the largest Curve pool to become unbalanced and pushing the price of USD0++ below $1.

As of press time, Usual Labs, the company behind the Usual protocol, made no public statements on USD0++’s price changes. In 2024, Usual Labs raised $7 million and secured a $75 million commitment in total value locked for USD0 from investors including IOSG Ventures, Kraken Ventures, GSR, Mantle, Starkware, and Flowdesk, among others.

0

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

PoolX: Locked for new tokens.
APR up to 10%. Always on, always get airdrop.
Lock now!