# Whitepaper

The **Usual Whitepaper** is the definitive technical and economic reference for the **Usual Protocol**. It presents the protocol’s core principles, vision, architecture, and mechanisms—covering everything from its **RWA-backed stablecoin infrastructure** to **disinflationary tokenomics** and a **community-first governance** model.

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## What the Whitepaper Covers

The whitepaper provides a comprehensive treatment of the following areas:

### Vision & Problem Statement

Usual addresses a structural imbalance in the stablecoin market: centralized issuers such as Tether and Circle generated over **$10 billion in combined revenue in 2023** from user-deposited collateral—without sharing that value with the users who enabled it.

Usual reimagines this model by redistributing **100% of protocol value to the community** through the **USUAL** governance token.

### Architectural Design

The protocol is organized into two distinct layers:

| Layer                                      | Description                                                                                                                                                                                                              |
| ------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |
| **Usual Collateral Bridge Infrastructure** | The foundational layer that manages **Liquid Deposit Token (LDT)** minting and redemption, as well as collateral onboarding. It bridges both permissioned (institutional) and permissionless (retail/DeFi) participants. |
| **Product Offerings Layer**                | Products built on top of LDTs—including **Liquid Bond Tokens (bUSD0)**, **Liquidity Yield Tokens (LYTs)**, **Instant Yield Tokens (IYTs)**, and staking modules—that support ecosystem sustainability and growth.        |

### Core Products

* **USD0** — The first **Liquid Deposit Token (LDT)**: a USD-pegged stablecoin fully backed by **US Treasury Bills** and **reverse repurchase agreements**, with **on-chain verifiable reserves**.
* **bUSD0** — A **Liquid Bond Token (LBT)** that locks USD0 to generate yield via **daily USUAL token coupons**, with **guaranteed 1:1 redemption at maturity (June 2028)**.
* **USUAL** — The governance and revenue-sharing token representing ownership of **100% of protocol revenue.**
* **USUALx** — **Staked USUAL**. USUALx receives **\~22% of all daily emissions** (an **anti-dilution** right) and also receives protocol revenue via the **Revenue Switch**.

### RWA Collateral & Risk Management

The whitepaper specifies strict eligibility criteria for accepted collateral:

* **Fully collateralized** — No leverage or fractional reserve exposure
* **Low risk** — Only sovereign bonds (**US Treasury Bills**) with the lowest market risk
* **Transparent** — On-chain verifiable with frequent off-chain audits
* **Liquid** — Portfolio duration capped at **0.33 years** (≈ **4 months**)
* **Zero tolerance** for FX risk and credit risk (no corporate debt)

A **Multi Collateral Controller** dynamically manages portfolio composition across multiple RWA providers (including **Hashnote USYC**, **M by M0**, **USTBL**, and others). It uses a dual-layer system—**continuous reward adjustments** and **triggered rebalancing**—to maintain robust diversification.

### Revenue Switch & Value Distribution

The **Revenue Switch**, activated on **January 13, 2025**, distributes protocol revenue directly to **locked USUALx** stakers in **USD0** on a **weekly** basis.

The protocol generates approximately **\~$5.5–6 million per year** in revenue (current estimate, post-UIP-11 disinflation), creating a direct and measurable link between protocol growth and token-holder returns.

### Governance

**USUAL** and **USUALx** holders govern critical protocol parameters, including:

* Collateral onboarding
* Fee structures
* Emission allocations
* Treasury management
* Insurance fund sizing

This governance model ensures the protocol evolves in line with community interests.

### Safety Mechanisms

The whitepaper describes multiple safety mechanisms:

* **Counter Bank Run Mechanism** — An insurance fund that burns LDT to maintain the salvageable redemption value per USD0
* **Instant Yield Tokens (IYTs)** — A repegging mechanism that uses secondary-market buybacks to restore bUSD0 parity

***

*This document is updated as the protocol evolves, incorporating governance-driven advancements, new products, and tokenomics reforms.*

*Last update: Nov 2025*


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