USD0
USD0 is the first stablecoin issued by Usual Protocol. It is a permissionless, fully collateralized stablecoin backed by tokenized US Treasury Bills and repurchase agreements (repos). USD0 is the foundational asset of the Usual ecosystem, connecting institutional‑grade real‑world assets (RWAs) with the composability of DeFi.
Why USD0?
The stablecoin market is largely controlled by centralized issuers. In 2023, Tether and Circle generated over $10B in revenue from user deposits while sharing none of that value with the users who enabled it. In addition, their reserve strategies typically include commercial bank deposits and other opaque structures, exposing users to counterparty risk—highlighted by the March 2023 Silicon Valley Bank event, when USDC briefly depegged to ~$0.95.
USD0 is designed to address these structural issues:
Limited bank risk: Collateral is invested exclusively in US Treasury Bills and overnight repos, eliminating fractional reserve exposure and commercial bank counterparty risk.
Revenue redistribution: Instead of directing 100% of yield to the issuer, Usual redistributes 100% of protocol value to the community via the USUAL token.
On‑chain verifiable reserves: No dependence on periodic accounting attestations, anyone can audit USD0’s backing in real time on-chain.
Collateral
US Treasury Bills (on‑chain)
Bank deposits + Treasuries
Mixed reserves
Transparency
Real‑time on‑chain verification
Monthly attestations
Quarterly reports
Revenue sharing
90% to community via USUAL
None
None
Bank risk
Limited
Yes (SVB event)
Partial
Governance
Community‑driven (DAO)
Corporate
Corporate
USD0 as a Fiat Backed Stablecoin
USD0 follows an Fiat Backed Stablecoin model. Rather than relying on opaque bank deposits, USD0 aggregates tokenized US Treasury Bill assets from multiple institutional providers directly on-chain.
This system is implemented through the Usual Collateral Bridge Infrastructure (UCBI), the protocol layer responsible for:
collateral onboarding
minting and redemption
reserve management integrations
Participant model
UCBI connects two participant types:
Permissioned users (institutional participants, accredited investors) can directly deposit and redeem the underlying RWA collateral.
Permissionless users (retail, DeFi participants) interact via an indirect matching system that pairs permissioned Collateral Providers (CPs) with permissionless minters.
This architecture enables 1:1 on-chain minting and redemption for all users, regardless of direct access to the underlying tokenized securities.
Scalability note: USD0 is the first USD‑denominated LDT. The same architecture is designed to extend to additional asset classes, including ETH0 (LST/LRT-backed), EUR0 (Eurozone-backed).
Key Features
Permissionless and composable
USD0 is a standard ERC‑20 token and is fully transferable. It is designed to integrate across DeFi:
collateral on lending markets (e.g., Morpho, Aave)
trading pairs on DEXs (e.g., Curve, Uniswap)
base asset for Usual products (bUSD0, sUSD0, USD0a)
Enhanced security model
Circulating USD0 supply is fully collateralized by US Treasury Bills and repos, with:
no leverage
no fractional reserves
limited commercial banking exposure
Risk constraints include:
portfolio duration below 0.33 years (to reduce interest rate risk)
zero tolerance for FX risk and credit risk
Real‑time transparency
Reserve composition and value are visible on-chain at all times. Fund administrators publish reserve data in real time, removing reliance on periodic third‑party attestations.
Unified, deconcentrated liquidity
USD0 aggregates RWA deposits across multiple issuers (e.g., Hashnote, M0, Spiko, and others). This creates a deconcentrated collateral base that reduces dependence on any single provider.
Peg protection
Peg stability is enforced by the Multi Collateral Controller, which includes:
Programmatic 1:1 backing enforced by smart contracts
Arbitrage support: USD0 is redeemable at par via the protocol, creating natural price floors and ceilings
Insurance fund: a dedicated reserve (0.33%–5.33% of USD0 supply) that can burn tokens to restore per‑unit backing in stress scenarios
Intelligent mint routing: mint orders can route through Curve pools when secondary market pricing is more favorable, helping maintain a tight peg.
RWA Collateral
USD0 is backed exclusively by tokenized RWAs that meet strict eligibility criteria:
Fully collateralized (no leverage or fractional reserve exposure)
Low risk (only sovereign bonds—US Treasuries—accepted)
Transparent (on-chain verifiable; frequent off-chain audits)
Liquid (portfolio duration below 0.33 years; assets redeemable within 5 days)
Primary collateral: Hashnote USYC
Contract
0x136471a34f6ef19fE571EFFC1CA711fdb8E49f2b
Strategy
Reverse repos and US Government securities
Custody
BNY Mellon
Auditor
Cohen and Co
Settlement
T+0 to T+1 (USDC or PYUSD)
Regulation
CIMA Licensed, CFTC Registered
USYC’s underlying reverse repos are executed with the Depository Trust & Clearing Corporation (DTCC), which carries an AA‑ credit rating.
Additional accepted collateral
M by M0
0x866A2BF4E572CbcF37D5071A7a58503Bfb36be1b
US Treasury Bills
USDC (limited)
0xA0b86991c6218b36c1d19D4a2e9Eb0cE3606eB48
US Treasury Bills
USTBL by SPIKO
0xe4880249745eAc5F1eD9d8F7DF844792D560e750
US Treasury Bills
For internal operations, the protocol maintains wrapped versions:
UsualM:
0x4Cbc25559DbBD1272EC5B64c7b5F48a2405e6470UsualUSDtb:
0x58073531a2809744D1bF311D30FD76B27D662abBUsualUSDC:
0xb672B3976bAa3952bFb2eCE8eeFB784f8daB1424
Collateral governance
Collateral onboarding and risk parameters are governed by the community via USUAL token governance, including:
adding/removing collateral types
setting exposure limits
adjusting risk parameters
Flow and Architecture
Minting USD0
USD0 can be minted through two primary paths.
Direct minting (RWA deposit)
Users deposit eligible tokenized RWAs (e.g., USYC, M, USDTB) into the protocol and receive USD0 1:1.
Contract (Ethereum):
0xde6e1F680C4816446C8D515989E2358636A38b04(DaoCollateral)Best suited for institutional users and holders of tokenized RWAs.
Indirect minting (via USDC)
Users deposit USDC; a Collateral Provider (CP) supplies the underlying RWA collateral on the user’s behalf. CPs receive an instant reward in USUAL once the cycle completes. Reward rates are dynamically adjusted by the Multi Collateral Controller to incentivize balanced collateral composition.
Contract (Ethereum):
0xB969B0d14F7682bAF37ba7c364b351B830a812B2(SwapperEngine)Designed for permissionless access (users do not need to hold tokenized RWAs).
Orders below 100,000 USD0 are routed to secondary markets (DEXs).
Mint routing optimization
The protocol supports intelligent routing to reduce slippage and support peg discipline:
Small mint orders may route through the Curve or Uniswap v3 USD0/USDC pool when more efficient. A maximum trade size is computed to prevent significant USD0 over‑pegging.
Redeeming USD0
USD0 redemption can occur via:
- Direct redemption
Present USD0 to the DaoCollateral contract and receive underlying tokenized Treasury collateral at par (1:1).
- Secondary market sale
Sell USD0 for USDC/USDT on Curve, Uniswap, or other supported venues. Peg dynamics are supported by arbitrage:
USD0 < $1: arbitrageurs buy USD0 on DEXs and redeem at par → buying pressure supports the peg
USD0 > $1: arbitrageurs mint at par and sell at a premium → selling pressure tightens the peg
Flow summary
Contract Addresses
USD0 token
Ethereum
0x73A15FeD60Bf67631dC6cd7Bc5B6e8da8190aCF5
Arbitrum
0x35f1C5cB7Fb977E669fD244C567Da99d8a3a6850
Base
0x758a3e0b1F842C9306B783f8A4078C6C8C03a270
BNB Chain
0x758a3e0b1f842c9306b783f8a4078c6c8c03a270
Infrastructure contracts (Ethereum)
DaoCollateral
0xde6e1F680C4816446C8D515989E2358636A38b04
Direct minting and redemption
SwapperEngine
0xB969B0d14F7682bAF37ba7c364b351B830a812B2
Indirect minting via USDC
ClassicalOracle
0xb97e163cE6A8296F36112b042891CFe1E23C35BF
Collateral price feeds
Chainlink USD0 Oracle
0x7e891DEbD8FA0A4Cf6BE58Ddff5a8ca174FebDCB
External USD0 pricing
Last updated