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.
Architecture
The RWA Aggregator connects permissioned RWA tokenizers to permissionless DeFi users.
Key idea: UCBI bridges permissioned RWA issuance with permissionless DeFi participation, while maintaining 1:1 mint/redeem behavior and on-chain transparency.
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 3 days.
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.
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:
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
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
UsualUSDtb (Wrapped USDtb)
0x58073531a2809744D1bF311D30FD76B27D662abB
UsualUSDC (Wrapped USDC)
0xb672B3976bAa3952bFb2eCE8eeFB784f8daB1424
Tokenizer Due Diligence Process
Every candidate tokenizer is evaluated across the following dimensions before collateral acceptance:
Security: Only experienced tokenizers whose technology has been thoroughly audited.
Regulatory compliance: Full compliance with applicable regulations across relevant jurisdictions.
Asset management: Skilled, compliant managers operating under strict diversification guidelines.
Transparency: Full transparency of underlying assets, audited by independent third parties.
Asset protection: Assets must be ring-fenced if the tokenizer enters bankruptcy.
Fee structure: Fees must be reasonable and must not materially erode returns.
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
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.
