# USD0 > **Last updated:** 2026-02-16 *** ## Executive Summary **USD0** is a USD-pegged stablecoin issued by **Usual DAO** and fully collateralized by **short-duration U.S. Treasury Bills** and equivalent sovereign instruments. It is a permissionless, composable ERC-20 that can be minted and redeemed 1:1 against eligible real-world asset (RWA) collateral at any time. USD0 operates on **Ethereum** (primary), **Arbitrum**, **Base**, and **BNB Chain**. The collateral backing USD0 is held through multiple regulated tokenizers — primarily **Hashnote (USYC)**, with additional diversification via **M^0 ($M)** and **Spiko (USTBL)** — each subject to independent custody, auditing, and regulatory oversight. The protocol enforces a **zero-tolerance policy** on credit and FX risk, a maximum portfolio-average duration of **0.33 years**, and maintains a dedicated **Insurance Fund** sized between 0.33% and 5.33% of circulating USD0 supply. Minting and redemption are managed through two on-chain pathways: **direct** (deposit/withdraw tokenized T-Bills) and **indirect** (deposit USDC, matched with a collateral provider). Peg stability is maintained through arbitrage incentives, a multi-collateral controller, and a **Counter Bank Run (CBR) mechanism** as a last-resort safeguard. The protocol has undergone **20+ independent security audits** since May 2024. *** ## Key Facts | Parameter | Detail | | ------------------------- | -------------------------------------------------------------------------------- | | **Token name** | USD0 | | **Token standard** | ERC-20 | | **Peg** | 1 USD0 = 1 USD | | **Decimals** | 18 | | **Issuer** | Usual DAO (governance-owned) | | **Collateral** | 100% short-duration U.S. Treasury Bills and equivalent sovereign instruments | | **Primary tokenizer** | Hashnote (USYC) — CIMA licensed, CFTC registered | | **Additional tokenizers** | M^0 ($M), Spiko (USTBL — AMF regulated, UCITS) | | **Custody (USYC)** | The Bank of New York Mellon | | **Chains** | Ethereum, Arbitrum, Base, BNB Chain | | **Minting** | 1:1 against eligible RWA collateral (direct) or USDC (indirect) | | **Redemption** | 1:1 at par, on-chain, any time | | **Min. primary order** | 100,000 USD0 (indirect path); no minimum (direct path) | | **Audits** | 20+ audits — Cantina, Sherlock, Spearbit, Halborn, Hexens, Paladin, OAK Security | | **Governance** | 100% DAO-owned (UIP-15, Dec 2025) | *** ## Collateral Framework ### Eligible Collateral USD0 collateral must satisfy **four core criteria**: (1) fully collateralized with no leverage, (2) low-risk sovereign instruments only, (3) transparent with on-chain verifiability and independent audits, and (4) liquid with a maximum redemption horizon of **5 business days**. | Collateral | Issuer / Tokenizer | Regulatory Status | Custody | Settlement | | ---------- | ------------------------------------ | -------------------------------------- | ------------------------------------ | --------------------- | | **USYC** | Hashnote (Short Duration Yield Fund) | CIMA licensed, CFTC registered | BNY Mellon | T+0 to T+1 | | **M** | M^0 Protocol | Governed by Two-Token Governance (TTG) | SPV-held T-Bills, validated on-chain | On-chain | | **USTBL** | Spiko (US T-Bills Money Market Fund) | AMF authorized (France), UCITS | CACEIS Bank | Same-day (J) | | **USDC** | Circle | NY DFS regulated | Various (see Circle disclosures) | Indirect minting only | ### Risk Parameters | Parameter | Limit | | ---------------------------------- | ------------------------------------------------------------------------------------ | | **Max individual RWA duration** | < 0.5 years | | **Max portfolio average duration** | ≤ 0.33 years (\~4 months) | | **Passive deviation tolerance** | 0.25 years | | **FX risk** | Zero tolerance — USD-only or 100% hedged | | **Credit risk** | Zero tolerance — U.S. Treasuries, quasi-government, and cash only; no corporate debt | | **Max redemption horizon** | 5 business days | ### Tokenizer Due Diligence Each collateral tokenizer is evaluated across five dimensions before governance approval: 1. **Structuring & Regulation** — Legal entity, jurisdiction, bankruptcy remoteness, compliance framework 2. **Product Description** — Subscription/redemption mechanics, fees, token specifications 3. **Asset Management** — AUM, custody arrangements, investment policy constraints 4. **Risk Policy** — Audits performed, counterparty exposure, recovery procedures 5. **Operational Risk** — Governance, compliance history, business continuity planning ### Insurance Fund The protocol maintains a dedicated **Insurance Fund** to absorb adverse collateral events: | Parameter | Detail | | ---------------------- | ------------------------------------------------------------------------ | | **Funding rate** | \~20% of protocol yield (DAO-configurable) | | **Minimum size** | 0.33% of USD0 supply | | **Maximum size** | 5.33% of USD0 supply | | **Replenishment time** | \~24 days (at 0.33-year average duration, 5% coupon rate) | | **Stress scenario** | +100 bps interest rate shock in 1 month → \~0.33% loss (2022-calibrated) | *** ## Minting & Redemption ### Primary Market — Direct Path Institutional participants holding eligible tokenized collateral (USYC, $M, USTBL) may **deposit RWA tokens directly** into the protocol and receive USD0 at a 1:1 ratio. Redemption follows the reverse process: USD0 is surrendered and the holder receives the underlying RWA collateral at par. * **Contract:** DaoCollateral * **Exchange rate:** 1:1 at par (oracle-verified) * **Minimum:** None * **Settlement:** Immediate (on-chain) ### Primary Market — Indirect Path Users depositing **USDC** are matched with **Collateral Providers** who supply the RWA collateral on their behalf. Collateral Providers receive the USDC plus USUAL token incentives. * **Contract:** SwapperEngine * **Exchange rate:** 1USD0:1$ (depending of USDC price on secondary market) * **Minimum order:** 100,000 USD0 (orders below this threshold are routed to secondary markets) * **Settlement:** Dependent on collateral provider matching (typically same-day) ### Secondary Market USD0 is available on decentralized exchanges (Curve, Uniswap) and aggregators (Coswap, Velora) for immediate trading against USDC, USDT, and other assets. Arbitrage between primary and secondary markets naturally maintains peg stability. *** ## Fees | Fee type | Path | Amount | | ----------------------- | --------------------- | ----------------------------------------- | | Minting fee (direct) | RWA collateral → USD0 | 0 bps | | Minting fee (indirect) | USDC → USD0 | 0 bps (protocol level) | | Redemption fee (direct) | USD0 → RWA collateral | Governance-configurable (currently 0 bps) | | Secondary market | DEX trading | Standard AMM fees (pool-dependent) | Note: Collateral Providers receive USUAL token incentives for facilitating indirect minting. Fee parameters are subject to change through DAO governance. *** ## Peg Stability Mechanisms ### 1. Arbitrage Full redeemability at par creates a natural arbitrage loop: * **USD0 < $1:** Buy discounted USD0 on secondary market → redeem at par against collateral → profit * **USD0 > $1:** Mint USD0 at par → sell at premium on secondary market → profit ### 2. Multi Collateral Controller (MCC) The MCC optimizes collateral weights across tokenizers using a risk-adjusted scoring function that incorporates expected return, qualitative scoring, duration, and volatility. It operates on two layers: * **Layer 1 — Continuous reward adjustment:** USUAL incentive rates for collateral providers are dynamically adjusted; underrepresented collateral types receive higher rewards. * **Layer 2 — Triggered rebalancing:** When any collateral weight deviates beyond a governance-set threshold (ε), the system triggers active rebalancing. ### 3. Oracle Infrastructure | Oracle | Address (Ethereum) | Function | | ------------------------- | -------------------------------------------- | ---------------------------- | | **ClassicalOracle** | `0xb97e163cE6A8296F36112b042891CFe1E23C35BF` | Primary collateral valuation | | **Chainlink USD0 Oracle** | `0x7e891DEbD8FA0A4Cf6BE58Ddff5a8ca174FebDCB` | External USD0 price feed | ### 4. Counter Bank Run (CBR) Mechanism In extreme stress scenarios, the protocol can activate the CBR mechanism: 1. **Burn Insurance Fund reserves** to absorb losses 2. **Pause minting engine** to prevent dilution 3. **Route all activity through secondary markets** while the situation is resolved ### 5. Interest Rate Monitoring The protocol monitors collateral yields via: * Daily weighted sum of collateral rates * 180-day rolling average * Alert thresholds: ±5% deviation from prior day or ±20% deviation from SOFR *** ## Revenue Model USD0 collateral generates yield from short-duration U.S. Treasury instruments. This yield accrues to the protocol and is distributed as follows: | Allocation | Share | Mechanism | | ------------------------- | ----- | ------------------------------------------------- | | **Locked USUALx holders** | 30% | Weekly USD0 distributions via Revenue Switch | | **DAO Treasury** | 70% | Funds protocol development, insurance, operations | * Revenue Switch activated: **January 13, 2025** * Note: Simply staking USUAL → USUALx earns USUAL emissions but does **not** qualify for USD0 revenue distributions. A **lock commitment** (1, 3, 6, or 12 months) is required. *** ## Security & Audits The protocol has undergone **20+ independent security audits** since May 2024, covering core protocol contracts, all token implementations, bridging infrastructure, investment vaults, staking modules, and economic model assessments.
FirmScopePeriod
CantinaCore protocol, DaoCollateral, SwapperEngine, DistributionMay – Dec 2024
SherlockMultiple audit campaigns (8+) across all modulesNov 2024 – Nov 2025
SpearbitCore protocol, tokens, investment vaultsJan – Jul 2025
HalbornCore protocol, staking, EUR0/ETH0Nov 2024 – Nov 2025
HexensCore protocol, economic modelMay – Nov 2025
PaladinL2 deployment, OFT adapters, cross-chainOct 2024
OAK SecurityEconomic assessmentFeb 2025
BlackthorneCore protocolDec 2024
**Security contact:** *** ## Smart Contract Addresses ### USD0 Token | Chain | Address | | ------------- | -------------------------------------------- | | **Ethereum** | `0x73A15FeD60Bf67631dC6cd7Bc5B6e8da8190aCF5` | | **Arbitrum** | `0x35f1C5cB7Fb977E669fD244C567Da99d8a3a6850` | | **Base** | `0x758a3e0b1F842C9306B783f8A4078C6C8C03a270` | | **BNB Chain** | `0x758a3e0b1f842c9306b783f8a4078c6c8c03a270` | ### Core Protocol Contracts (Ethereum) | Contract | Address | | -------------------- | -------------------------------------------- | | **DaoCollateral** | `0xde6e1F680C4816446C8D515989E2358636A38b04` | | **SwapperEngine** | `0xB969B0d14F7682bAF37ba7c364b351B830a812B2` | | **TokenMapping** | `0x43882C864a406D55411b8C166bCA604709fDF624` | | **RegistryAccess** | `0x0D374775E962c3608B8F0A4b8B10567DF739bb56` | | **RegistryContract** | `0x0594cb5ca47eFE1Ff25C7B8B43E221683B4Db34c` | ### Collateral Token Addresses (Ethereum) | Token | Address | | ----------------------- | -------------------------------------------- | | **USYC (Hashnote)** | `0x136471a34f6ef19fE571EFFC1CA711fdb8E49f2b` | | **M (M^0)** | `0x866A2BF4E572CbcF37D5071A7a58503Bfb36be1b` | | **UsualM (wrapped)** | `0x4Cbc25559DbBD1272EC5B64c7b5F48a2405e6470` | | **USDC** | `0xA0b86991c6218b36c1d19D4a2e9Eb0cE3606eB48` | | **UsualUSDC (wrapped)** | `0xb672B3976bAa3952bFb2eCE8eeFB784f8daB1424` | ### Oracles (Ethereum) | Oracle | Address | | ------------------------- | -------------------------------------------- | | **ClassicalOracle** | `0xb97e163cE6A8296F36112b042891CFe1E23C35BF` | | **Chainlink USD0 Oracle** | `0x7e891DEbD8FA0A4Cf6BE58Ddff5a8ca174FebDCB` | *** ## Governance USD0 is governed by **Usual DAO**, which holds **100% ownership** of all protocol assets, intellectual property, and operational parameters (UIP-15, December 2025). **Usual Labs** operates as a **service provider** to the DAO under a defined mandate. Key governance decisions affecting USD0: * Collateral onboarding/offboarding (e.g., UIP-14: USTBL approval; UIP-16: UZR approval) * Risk parameter calibration (duration limits, insurance fund sizing) * Fee structure modifications * Multi Collateral Controller weight adjustments * Emergency actions (CBR activation, minting pause) Governance is exercised through the **USUAL token** via on-chain voting (UIPs — Usual Improvement Proposals). *** ## Key Risks | Risk Category | Description | Mitigation | | ----------------------- | ---------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------ | | **Collateral risk** | Adverse event at a tokenizer or custodian could impair underlying collateral value | Diversified tokenizer base; Insurance Fund; CBR mechanism; zero credit/FX tolerance | | **Interest rate risk** | Rising rates reduce mark-to-market value of T-Bill holdings | Max portfolio duration ≤ 0.33 years; stress-tested for +100 bps shock | | **Counterparty risk** | Failure of tokenizer, fund manager, custodian, or banking partner | Multi-provider diversification; regulated entities (BNY Mellon, CACEIS); due diligence framework | | **Smart contract risk** | Vulnerability in protocol code | 20+ audits; upgradeable proxy architecture; bug reporting | | **Liquidity risk** | Temporary inability to redeem at par during extreme market stress | 5-day max redemption horizon; Insurance Fund; CBR mechanism; secondary market liquidity | | **Oracle risk** | Incorrect price feed could affect minting/redemption pricing | Dual oracle system (ClassicalOracle + Chainlink); monitoring alerts | | **Governance risk** | DAO decisions that adversely affect USD0 parameters | On-chain voting via UIPs; transparent proposal process; multi-signature execution | | **Regulatory risk** | Evolving regulatory landscape for stablecoins and tokenized securities | Multi-jurisdictional tokenizer diversification (CIMA, AMF, CFTC); no leverage; full backing | | **Concentration risk** | Over-reliance on a single collateral provider | Multi Collateral Controller enforces diversification; active expansion of tokenizer base | *** ## Quick Links * Usual Protocol — Documentation: * USD0 — Product Overview: * Collateral & Backing: * Minting & Redeeming: * Security & Audits: * Governance (UIPs): * Etherscan — USD0 Token: *** ## 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. USD0 is a decentralized protocol token governed by Usual DAO; participation involves risks including but not limited to smart contract risk, collateral risk, regulatory risk, and market risk. 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 USD0. 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. 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