RWA Collateral

USD0 collateral follows Usual’s stringent risk policy. It is backed exclusively by secure, short-duration assets, primarily U.S. Treasury Bills accessed through overnight repo and similar cash-management instruments.

Usual Labs selects collateral providers through extensive due diligence of the relevant market participants to mitigate counterparty and default risks. The objective is to provide USD0 holders with a security framework that is designed to exceed typical industry standards.

Overview

The RWA Aggregator is a core component of the Usual Collateral Bridge Infrastructure (UCBI)—the foundational layer that powers USD0 minting, redemption, and collateral management.

It aggregates tokenized Real-World Assets (RWAs) from multiple institutional providers into a unified, permissionless on-chain system. This enables USD0 to operate as a fully collateralized, on-chain verifiable stablecoin.

Instead of relying on a single collateral source or opaque off-chain reserves, the RWA Aggregator consolidates collateral from leading tokenized-asset issuers into a transparent and composable stablecoin that can be minted and redeemed 1:1.

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Architecture

The RWA Aggregator connects permissioned RWA tokenizers to permissionless DeFi users.

┌─────────────────────────────────────────────────────────────┐
│                   RWA Tokenizers (Permissioned)             │
│  ┌──────────┐  ┌──────────┐  ┌──────────┐  ┌────────────┐   │
│  │ Hashnote │  │  M by M0 │  │  USTBL   │  │   Others   │   │
│  │  (USYC)  │  │          │  │ (Spiko)  │  │            │   │
│  └────┬─────┘  └────┬─────┘  └────┬─────┘  └─────┬──────┘   │
└───────┼──────────────┼──────────────┼─────────────┼─────────┘
        │              │              │             │
        ▼              ▼              ▼             ▼
┌─────────────────────────────────────────────────────────────┐
│              RWA Aggregator (UCBI Layer)                    │
│                                                             │
│  ┌───────────────────┐    ┌──────────────────────────┐      │
│  │  Multi Collateral │    │  Collateral Wrapping &   │      │
│  │    Controller     │    │  On-Chain Verification   │      │
│  └────────┬──────────┘    └────────────┬─────────────┘      │
│           │                            │                    │
│           ▼                            ▼                    │
│  ┌──────────────────────────────────────────────────┐       │
│  │           DaoCollateral Contract                 │       │
│  │    0xde6e1F680C4816446C8D515989E2358636A38b04    │       │
│  └──────────────────────┬───────────────────────────┘       │
└─────────────────────────┼───────────────────────────────────┘
                          │
                          ▼
┌─────────────────────────────────────────────────────────────┐
│                 USD0 (Permissionless)                       │
│          0x73A15FeD60Bf67631dC6cd7Bc5B6e8da8190aCF5         │
│                                                             │
│   Mint ◄──► Redeem ◄──► Trade ◄──► Compose in DeFi          │
└─────────────────────────────────────────────────────────────┘

Key idea: UCBI bridges permissioned RWA issuance with permissionless DeFi participation, while maintaining 1:1 mint/redeem behavior and on-chain transparency.

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Collateral Eligibility Criteria

Before any Real-World Asset (RWA) tokenizer is accepted as collateral for USD0, it must pass a comprehensive due diligence process. All accepted collateral must satisfy four core requirements:

Criterion	Requirement
Fully Collateralized	100% collateralized with no leverage exposure. This excludes fractional-reserve risk and any leverage structure that could result in collateral loss.
Low Risk	Invested exclusively in liquid U.S. Treasury Bills (or equivalent government-backed cash instruments). Counterparty, liquidity, credit, interest-rate, and FX risks are each evaluated independently.
Transparent	Verifiable on-chain in real time, with frequent public financial audits to provide high off-chain transparency.
Liquid	Highly liquid with portfolio duration < 0.33 years (~4 months). Any collateral exceeding this duration threshold is ineligible. Redemptions must be achievable with minimal slippage within a maximum of 5 business days.

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Financial Risk Policy

Usual enforces a multi-layer risk management framework with zero tolerance for credit and FX risk:

• Interest Rate Risk

  • Individual RWA duration must be < 0.5 years.

  • Portfolio average duration must not exceed 0.33 years.

  • A passive fluctuation tolerance of 0.25 years is allowed.

  • If breached, corrective measures may include duration adjustment, withdrawal restrictions, and/or insurance fund increases.

• FX Risk

  • Zero tolerance: only USD-denominated assets or 100% FX-hedged positions are accepted.

  • FX exposure is monitored by both the tokenizer and Usual independently.

• Credit Risk

  • Zero tolerance: investments restricted to U.S. Treasuries, quasi-government debt, or cash.

  • Corporate debt is prohibited.

• Liquidity Risk

  • Portfolio diversification across multiple RWA types is used to reduce asset-class-specific illiquidity risk.

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Primary Collateral: Hashnote USYC

Property	Detail
Token	USYC (Short Duration Yield Fund)
Contract	0x136471a34f6ef19fE571EFFC1CA711fdb8E49f2b
Strategy	Reverse repurchase agreements + US Government securities
Custody	BNY Mellon
Prime Broker	Marex
Auditor	Cohen and Co
Fund Administrator	NAV Consulting
Regulatory	CIMA Licensed, CFTC Registered
Settlement	T+0 to T+1 into USDC or PYUSD

USYC was the first tokenizer to pass Usual’s due diligence process. Its underlying reverse repos are made with the Depository Trust & Clearing Corporation (DTCC), which carries an AA- credit rating.

Usual’s first and primary collateral partner is Hashnote. Over time, the protocol intends to diversify USD0 (bUSD0) collateral holdings to further reduce concentration risk. Any future collateral additions remain subject to community governance.

What is USYC?

USYC is the on-chain representation of the Hashnote International Short Duration Yield Fund Ltd. (“SDYF”). SDYF invests primarily in:

• Reverse repurchase agreements

• U.S. Government-backed securities

The underlying reverse repos are conducted with the Depository Trust & Clearing Corporation (DTCC) (credit rating AA-). Hashnote is managed by an experienced investment team.

Why USYC?

Because USYC is invested in overnight repo, it is designed to minimize:

• market risk,

• duration risk,

• and credit risk.

This results in a risk profile comparable to a U.S. Treasury money market fund, while also providing ERC-20 benefits such as transaction speed, transparency, and composability.

USYC provides access to short-term “risk-free” returns by deploying assets primarily into reverse repo, with a portion allocated to T-Bills to maintain maximum liquidity and minimal duration exposure.

Liquidity

• Mint/redeem time: T+0 to T+1 into USDC or PYUSD

• Atomic on-chain instant mint/redeem:

  • On-chain mint is available only during market hours

  • On-chain redemption is available at any time, but size-limited

Safety

• No credit intermediaries

• No loans to third parties

• Fully regulated by CIMA

• Direct access to a segregated custodial account

Transparency

• Assets and token price are published via oracle feed

• All fees (service, redemption, custodian) are fully disclosed

• ERC-20 contract is verified on Etherscan

Fund Management

USYC is operated by Hashnote, an on-chain institutional asset manager backed by partners of DRW. Hashnote maintains an in-house fixed income team with a track record in consistent risk-adjusted returns and liquidity management.

Service Providers & Regulatory Compliance

• Cash and securities custody: Bank of New York Mellon

• Hashnote offshore funds: licensed as mutual funds by the Cayman Islands Monetary Authority (CIMA)

• U.S. fund manager: registered as a CPO with the Commodity Futures Trading Commission (CFTC)

On-Chain Information

Property	Value
Token standard	ERC-20
Available networks	Ethereum
Address	0x136471a34f6ef19fE571EFFC1CA711fdb8E49f2b

Providers

Role	Provider
Custody	BNY Mellon
Prime broker	Marex
Bank	Customers Bank
Auditor	Cohen and Co
Fund admin	NAV Consulting
KYC / AML	NAV Consulting, LMO Consulting

Regulation

Region	Details
US	CFTC — US-CPO for Hashnote Feeder Fund
Non-US	CIMA — SDYF and Hashnote Master Fund registered as Caymans Mutual Funds

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Additional Accepted Collateral

As the protocol has grown, additional collateral types have been onboarded to diversify risk:

Asset	Contract Address	Type	Backing
USYC (Hashnote)	0x136471a34f6ef19fE571EFFC1CA711fdb8E49f2b	Primary collateral	Reverse repos & U.S. Government securities
M by M0	0x866A2BF4E572CbcF37D5071A7a58503Bfb36be1b	Collateral	U.S. Treasury Bills
USTBL (Spiko)	0xe4880249745eAc5F1eD9d8F7DF844792D560e750	Collateral	U.S. Government securities
USDC	0xA0b86991c6218b36c1d19D4a2e9Eb0cE3606eB48	Indirect minting	Circle USD Coin

Wrapped Collateral (Internal Protocol Use)

Usual maintains wrapped versions of certain collateral assets for internal protocol integrations:

Wrapped Asset	Contract Address
UsualM (Wrapped M)	0x4Cbc25559DbBD1272EC5B64c7b5F48a2405e6470
UsualUSDC (Wrapped USDC)	0xb672B3976bAa3952bFb2eCE8eeFB784f8daB1424

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Tokenizer Due Diligence Process

Every candidate tokenizer is evaluated across the following dimensions before collateral acceptance:

1. Security: Only experienced tokenizers whose technology has been thoroughly audited.

2. Regulatory compliance: Full compliance with applicable regulations across relevant jurisdictions.

3. Asset management: Skilled, compliant managers operating under strict diversification guidelines.

4. Transparency: Full transparency of underlying assets, audited by independent third parties.

5. Asset protection: Assets must be ring-fenced if the tokenizer enters bankruptcy.

6. Fee structure: Fees must be reasonable and must not materially erode returns.

7. Redemption processes: Prompt, operationally clear redemption paths.

8. Diversification: Diversified exposure across platforms to reduce concentration risk.

Counterparty Risk Layers

Usual identifies three counterparty-risk layers and applies mitigation controls at each level:

Layer	Mitigation
Tokenizer risk	Bankruptcy remote vehicles (BRVs), independent audits, periodic performance reviews
Fund manager risk	Regulated managers with proven track records; ongoing assessment of investment decisions
Bank/custodian risk	Highly rated institutions only; diversified banking relationships; contingency planning for institutional failures

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Community Governance of Collateral

A core differentiator of Usual is that the community governs which collateral types are accepted by the protocol. Through USUAL token governance, holders can vote on:

• Adding new collateral types

• Setting maximum exposure limits per collateral provider

• Adjusting risk parameters based on market conditions

• Removing collateral that no longer meets protocol standards

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Insurance Fund

Usual maintains an insurance fund per Liquid Deposit Token (LDT) to hedge against collateral value loss:

• Accrual rate: set by the DAO (approximately 20% of yield)

• Maximum cap: between 0.33% and 5.33% of all USD0 LDTs

  • calibrated using historical VAR analysis and stress tests simulating extreme interest-rate rises beyond any observed in the last 30 years

• Replenishment time: with a 0.33-year average bond duration and 5% coupon rate, approximately 24 days to fully replenish

Counter Bank Run Mechanism (CBR)

The Counter Bank Run Mechanism (CBR) uses the insurance fund to:

• burn USD0, and

• increase the salvageable redemption value per token.

If the salvageable value falls below 1, the DAO can temporarily pause the minting engine and route activity through the secondary market to prioritize re-pegging USD0.