ETH0 Characteristics

ETH0 provides several unique benefits for both individual DeFi users and institutional participants:

• Higher Yield on ETH: Holding ETH0 lets you earn extra yield on your ETH position. The staking rewards from the collateral are distributed as USUAL governance tokens to ETH0 holders, boosting your overall return beyond the typical ~3% ETH staking yield . This means your ETH can work harder for you, capturing significantly higher yields than conventional staking or restaking strategies – all while you still maintain a 1:1 exposure to ETH’s price movements.

• Maintain 1:1 ETH Exposure: ETH0 is always roughly equal in value to 1 stETH, by design. You retain full exposure to ETH’s price (up or down) without any additional volatility. There’s no risk of your asset drifting away from the value of stETH, since controlled minting/redeeming and arbitrage mechanisms enforce the peg. This makes ETH0 a reliable proxy for ETH itself, suitable for use as a base asset in trades, collateral in loans, or a unit of account.

• Liquidity & Composability: ETH0 is a liquid ERC-20 token that can be easily transferred, traded, or integrated into other protocols. Because it’s pegged to ETH, many DeFi applications can support it with minimal adjustments. For example, liquidity pools, lending markets, or yield farms can include ETH0 alongside ETH. The token is fully on-chain and permissionless, ensuring seamless integration and accessibility within the DeFi ecosystem . In short, ETH0 offers a “liquid, composable, and yield-optimized” vehicle for using ETH in DeFi .

• Trusted Collateral & Security: Each ETH0 is backed by wstETH (stETH accumulative version), one of DeFi’s most established and transparently managed staking assets. All collateral is on-chain and verifiable, giving holders confidence in the backing of the token. The protocol employs robust risk management – including reliable price oracles and emergency pause mechanisms – to protect users and the peg . The smart contracts have been audited, and the system is built on the same battle-tested framework that underpins Usual’s USD0 stablecoin. There is no fractional reserve or algorithmic trickery involved: it’s a straightforward model of $1 of stETH in = $1 of ETH0 out, ensuring a high level of trust.

By combining the stability of a 1:1 ETH-pegged token with the yield opportunities of staked ETH (and additional USUAL rewards), ETH0 allows investors to put their ETH to work more efficiently. For hedge funds, treasuries, and whales looking to maximize returns on large ETH holdings – as well as regular DeFi users seeking a better way to hold ETH – ETH0 offers a secure, yield-enhanced alternative to holding plain Ether . It effectively transforms ETH into a yield-generating instrument without sacrificing liquidity or custody, all within an on-chain, permissionless framework.