# ETH0 > **Type:** Factsheet | **Squad:** Usual | **Status:** Draft | **Stream:** BD **Last updated:** 2026-02-16 *** ## Executive Summary **ETH0** is an Ethereum-pegged synthetic asset issued by **Usual DAO**, fully collateralized 1:1 by **Lido's wrapped staked ETH (wstETH)**. Each ETH0 in circulation is backed by at least 1 ETH worth of wstETH held in the protocol's on-chain Collateral Treasury. ETH0 is designed to track the value of ETH while providing holders with access to **USUAL token emissions** on top of the native ETH staking yield embedded in wstETH. Unlike USD0 and EUR0, which are fiat-pegged stablecoins backed by Treasury Bills, ETH0 is an **ETH-denominated synthetic** with full crypto-market exposure. Holding ETH0 is economically equivalent to holding ETH: the token appreciates and depreciates in USD terms with the ETH price. The staking rewards generated by the underlying wstETH collateral (approximately 3.0--3.5% APR) are captured by the protocol and redistributed as USUAL governance tokens, providing an additional yield layer. ETH0 uses the same on-chain collateral infrastructure established for USD0, including permissionless minting/redemption, oracle-based circuit breakers, and DAO governance over collateral parameters. ETH0 was approved via **UIP-8** (June 9, 2025; 94.7% For) and launched in **June 2025**. It has been audited by **Hexens** and **Spearbit**, with additional coverage across the broader Usual audit program (20+ audits since May 2024). *** ## Key Facts | Parameter | Detail | | ------------------------ | ---------------------------------------------------------------- | | **Token name** | ETH0 | | **Token standard** | ERC-20 | | **Peg** | 1 ETH0 = 1 ETH (in ETH terms) | | **Asset type** | ETH-denominated synthetic | | **Decimals** | 18 | | **Issuer** | Usual DAO (governance-owned) | | **Collateral** | 100% Lido wstETH (wrapped staked Ether) | | **Native staking yield** | \~3.0--3.5% APR (ETH consensus-layer rewards, accrued in wstETH) | | **Additional yield** | USUAL token emissions to ETH0 holders | | **Chain** | Ethereum | | **Minting** | Permissionless; 1:1 deposit of wstETH | | **Redemption** | 1:1 withdrawal of wstETH, on-chain, at any time | | **Redemption fee** | 5 bps (governance-configurable) | | **Launch date** | May 2025 | | **Governance approval** | UIP-8 (June 9, 2025; 94.7% For) | | **Governance** | 100% DAO-owned (UIP-15, Dec 2025) | *** ## Collateral Framework ### Collateral Asset: wstETH (Lido) | Parameter | Detail | | -------------- | ---------------------------------------------------------------------------------------------- | | **Asset** | wstETH (wrapped staked Ether) | | **Provider** | Lido Finance | | **Underlying** | ETH staked on Ethereum's Beacon Chain via Lido | | **Token type** | Non-rebasing; value appreciates as staking rewards accrue (wstETH/ETH exchange rate increases) | | **TVL (Lido)** | >$22 billion (at time of UIP-8 approval) | | **Liquidity** | Among the most liquid staking derivatives; redeemable for ETH via Lido withdrawals | ### Collateral Properties * **Fully collateralized (1:1):** No leverage, no fractional reserves. Every ETH0 is backed by at least 1 ETH worth of wstETH. * **Transparent:** Anyone can verify the wstETH balance held by ETH0-related contracts on-chain at any time. * **Ethereum-native:** Collateral resides entirely on Ethereum's Beacon Chain (via Lido). No traditional finance counterparty, no bank custody, no fund administrator, no tokenizer bankruptcy risk. * **Liquid:** wstETH is deeply liquid on major DEXs and redeemable for ETH via Lido withdrawals. ### Collateral Eligibility within the Usual Framework While USD0 and EUR0 collateral is constrained by portfolio duration, FX risk, and credit risk parameters suited to fiat-backed designs, ETH0 follows a **crypto-native framework** adapted for ETH-denominated collateral while maintaining the same overarching principles of full collateralization, low risk, transparency, and liquidity. *** ## Minting & Redemption ### Primary Market | Operation | Detail | | ------------------ | --------------------------------------------------------------------------------------------------------- | | **Mint** | Deposit wstETH to the DaoCollateral contract. For each 1 ETH worth of wstETH deposited, 1 ETH0 is minted. | | **Redeem** | Return ETH0 to the protocol. ETH0 is burned, and the equivalent wstETH is released. | | **Mint fee** | 0 bps (no fee) | | **Redemption fee** | 5 bps (protects treasury from oracle update exploits) | | **Access** | Permissionless (no KYC/KYB required) | | **Settlement** | Immediate (on-chain) | ### Secondary Market ETH0 is tradable on decentralized exchanges. Target liquidity pools include ETH0/wstETH and ETH0/ETH. Even if secondary market liquidity is limited, holders can always redeem ETH0 on-chain for the underlying wstETH at 1:1 (less redemption fee). *** ## Yield Structure ETH0 provides two sources of value to holders: ### 1. Native Staking Yield (wstETH) The wstETH collateral continuously accrues Ethereum consensus-layer rewards at approximately 3.0--3.5% APR. This yield is captured by the protocol as wstETH appreciates in ETH terms. ### 2. USUAL Token Emissions ETH0 holders receive USUAL governance token distributions. The daily USUAL emission for locked assets is split proportionally between bUSD0 and ETH0 based on the dollar value of each asset. This provides an additional yield layer on top of the native staking return. Revenue from wstETH staking yield is distributed to USUALx holders through the protocol's existing revenue-sharing model, alongside revenue from USD0's T-Bill interest. *** ## Fees | Fee | Amount | Notes | | --------------------- | --------- | ---------------------------------------------------------------- | | **Minting** | 0 bps | No protocol fee | | **Redemption** | 5 bps | Governance-configurable; protects against oracle update exploits | | **Secondary markets** | Per venue | Trading fees per exchange | *** ## Smart Contract Addresses ### ETH0 Token | Chain | Address | | ------------ | -------------------------------------------- | | **Ethereum** | `0x734eec7930bc84ec5732022b9eb949a81fb89abe` | ### Related Contracts (Ethereum) | Contract | Address | | ------------------------ | -------------------------------------------- | | **ETH0 ClassicalOracle** | `0x8a03c57069A25C7E6e62e9C0d03a2CC10A74b1a7` | | **Lido wstETH Oracle** | `0xEB9B65345B1eeD32153Ef85D97874c1aD98e5DC4` | | **DaoCollateral** | `0xde6e1F680C4816446C8D515989E2358636A38b04` | | **Distribution** | `0x75cC0C0DDD2Ccafe6EC415bE686267588011E36A` | | **Collateral Treasury** | `0xdd82875f0840AAD58a455A70B88eEd9F59ceC7c7` | *** ## Security & Audits ETH0 benefits from the broader Usual Protocol security program (20+ audits since May 2024), with the following ETH0-specific coverage: | Firm | Scope | Date | | ------------ | --------------------- | -------- | | **Hexens** | ETH0 audit | May 2025 | | **Spearbit** | ETH0 and Zapper audit | May 2025 | ETH0 reuses audited infrastructure from the USD0 protocol, which has undergone extensive review by Cantina, Sherlock, Halborn, and others. **Security contact:** *** ## Key Risks | Risk Category | Description | Mitigation | | ------------------------ | --------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | | **ETH market price** | ETH0 tracks ETH; holding ETH0 exposes holders to full ETH price volatility in fiat terms. A 20% ETH decline results in a \~20% decline in ETH0 USD value. | By design. ETH0 is not a fiat stablecoin. Users seeking to minimize ETH price volatility should consider USD0 or EUR0. | | **Lido / slashing risk** | A major slashing event, validator performance issues, or smart contract vulnerability in Lido could impair wstETH and therefore ETH0 collateral. | Chainlink oracle-based circuit breaker can automatically pause minting/redemption on anomaly detection. Full 1:1 collateralization. Insurance fund (DAO-configurable). Counter Bank Run (CBR) mechanism. | | **Smart contract risk** | Vulnerability in ETH0, DaoCollateral, or Lido contracts. | Hexens and Spearbit ETH0-specific audits. 20+ protocol-wide audits. Emergency pause/unpause mechanisms. Single-collateral design reduces attack surface. | | **Liquidity risk** | As a newer asset, ETH0 may have limited secondary market liquidity. | Direct on-chain redemption for wstETH at 1:1 (less fee) provides a liquidity backstop independent of secondary markets. USUAL-incentivized liquidity pools. | | **Oracle risk** | Incorrect wstETH price feed could affect minting/redemption pricing. | Dual oracle system (ETH0 ClassicalOracle + Lido wstETH Oracle). Circuit breaker on anomalous readings. | | **Counterparty risk** | Dependency on Lido for staking operations. | No traditional finance counterparty exposure (no bank, custodian, or tokenizer risk). Lido is the largest liquid staking protocol on Ethereum with extensive audit coverage and long operating track record. | | **Governance risk** | DAO decisions that adversely affect ETH0 parameters. | On-chain voting via UIPs; transparent proposal process; multi-signature execution. | *** ## Quick Links * ETH0 Product Documentation: * ETH0 Collateral and Risk: * UIP-8 (wstETH Onboarding): * Usual Protocol Documentation: * Security & Audits: * Etherscan (ETH0): * Lido Finance: *** ## Disclaimer This factsheet is provided for **informational purposes only** and does not constitute investment advice, an offer to sell, or a solicitation of an offer to buy any security or financial instrument. ETH0 is a decentralized protocol token governed by Usual DAO; participation involves risks including but not limited to smart contract risk, collateral risk, market risk (full ETH price exposure), and Lido staking risk. ETH0 is not a stablecoin and will fluctuate in fiat-denominated value. Past performance and historical data are not indicative of future results. Investors should conduct their own due diligence and consult professional advisors before acquiring or interacting with ETH0. All smart contract addresses should be independently verified on the respective block explorers. Protocol parameters are subject to change through DAO governance. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.usual.money/resources-and-ecosystem/fact-sheets/usual-products/eth0.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. 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