USD0++ Alpha Yield
Last updated
Last updated
Users who wish to gain exposure to Alpha Yield in the form of $USUAL tokens must lock their USD0 in a USD0 Liquid Bond (USD0++) for a specified period. In return, they have several options available to them.
Claiming Yield (3): The holder of the Liquid Bond can claim their yield daily in the form of USUAL tokens.
Base Interest Guarantee (4) : The holder of USD0++ is guaranteed a yield equivalent at minimum to the yield of the USD0 collateral (Risk-free yield). To achieve this, the user must lock their USD0++ for a specified period. At the end of this period, the user can choose to claim their rewards in the form of USUAL tokens or the risk-free yield in USD0.
Return of Principal: At the end of the bond's maturity period, the holder receives their principal in the form of the initially locked USD0.
The yield from Liquid Bonds is distributed natively in the form of USUAL tokens, the governance token of the Usual protocol. This yield is speculative due to the nature of the USUAL token, referred to as Alpha Yield.
Usual’s model is designed to outperform the native risk-free yield of the underlying asset. It incentivizes early entrants and ensures a sustainable flywheel effect.
The yield from USD0++ is called Alpha Yield (α-yield) because it includes an additional token with its own volatility and pricing. This provides exposure to the issuer’s success, not just the underlying yield. This financial engineering ensures that USUAL offers significantly better rates than the asset’s yield alone.
The USUAL token's value increases with the Total Value Locked (TVL). Early participation is theoretically highly beneficial, as the rewards are greater for those who join sooner.
