Usual Event Depth Analysis: USD0++ Decoupling and the Hidden Truth Behind the Loop Loan Get Liquidated

Recently, the USD0++ stablecoin issued by Usual has become the focus of the market due to its depeg, causing panic among many users. This article will systematically analyze the product logic, economic model of Usual, and the causal relationship of the recent depeg of USD0++ from the perspective of DeFi product design.

Analysis of Usual Product System

The Usual product system mainly includes 4 types of tokens:

1. Stablecoin USD0
2. Bond Token USD0++
3. Project Token USUAL
4. Governance Token USUALx

First Layer: Stablecoin USD0

USD0 is a collateralized stablecoin, using RWA assets as collateral. Users can mint USD0 in two ways:

1. Directly mint RWA assets
2. Mint USDC through the Swapper Engine contract.

Second Layer: Bond Token USD0++

USD0++ is a tokenized four-year floating rate bond. Holders can receive:

1. The returns corresponding to the underlying RWA assets
2. Daily distribution of earnings from newly added USUAL tokens

USD0 can be staked 1:1 to mint USD0++, with a default lock-up period of 4 years.

Layer 3: Project tokens USUAL and USUALx

USUAL can be obtained by staking USD0++ or purchasing on the secondary market. USUAL can mint governance token USUALx at a 1:1 ratio.

Analysis of the Depegging Event

On January 10th, Usual officially announced the modification of the USD0++ redemption rules:

1. Conditional Redemption: 1:1 ratio, but must sacrifice part of the USUAL returns
2. Unconditional Redemption: Minimum 87% ratio, no deduction of earnings.

This move has triggered market panic, resulting in a significant drop in the price of USD0++.

Analysis of Motivations

1. Accurate Get Liquidated Cycle Loan

Many users lend USDC in Morpho for USD0++, and then mint USD0++, forming a high-leverage circular loan. The floor price of 0.87 is just slightly higher than Morpho's liquidation line of 0.86, allowing for precise liquidation of these positions.

2. Market Rescue Attempts

The USUAL-USUALx economic model has a risk of a death spiral. The new rules attempt to boost the USUAL price through mechanism design, but the effectiveness is questionable.

Exposing Issues

1. Users did not read the documentation carefully when participating in DeFi projects.
2. The project party's decision-making is overly centralized, lacking community governance.
3. The industry continues to progress and develop by learning from lessons.

Despite the current market downturn, we should still maintain confidence in the Web3 industry. By continuously summarizing our experiences and lessons learned, truly meaningful projects will eventually emerge in the future.