Why USD0?
Last updated
Last updated
Fiat Stablecoins are the primary liquidity drivers in DeFi, yet they misallocate $150 billion in liquidity, posing systemic risks to DeFi and its users while privatizing profits at the expense of the broader community.
The primary imperative of a stablecoin is ensuring the value is safeguarded relative to the currency it represents. Users must have unwavering confidence that their capital is secure.
Stablecoins should be backed by assets that closely mirror central bank money. Government bond debt is the optimal choice for collateralizing stablecoins, offering the highest levels of liquidity and security in the current monetary system.
Issuers must collateralize stablecoins with very short maturity assets to ensure high levels of security for holders. This strategy prevents forced liquidation at discounted prices during significant redemptions, thereby protecting the value for stablecoin holders. It also prevents volatility events that could decrease the collateral value.
A stringent and transparent prudential policy is essential. It must ensure face value coverage at all times and strict adherence to risk management policies. In decentralized issuances, it is prudent to delegate risk policy validation to governance holders to maintain integrity and trust within the ecosystem.
Bridge RWA to DeFi liquidity. USUAL is multi-chain blockchain infrastructure. It aggregates the growing tokenized Real-World Assets from entities like BlackRock, Ondo, M0 and Hashnote, transforming them into a permissionless, on-chain verifiable, and composable stablecoin.
In 2023, Real World Assets (RWA) on the blockchain experienced a remarkable surge of over 800%. Despite this significant growth, RWAs still constitute only a small fraction of the underlying assets in the cryptocurrency market. The primary challenge lies in liquidity issues, including the difficulty institutions face in liquidating RWA holdings in the secondary market and the inaccessibility for retail investors to reap RWA returns within the core DeFi ecosystem.
While on-chain Real-World Asset (RWA) liquidity is growing, it remains non-composable in DeFi and largely inaccessible to individual users. The current infrastructure lacks the necessary liquidity to fully utilize its potential. Usual Labs introduces USD0 as a new stablecoin designed to bridge the liquidity gap between RWA and DeFi, offering maximum interoperability and enhanced security.
USD0 aims to be composable and integrate liquidity from both TradFi and DeFi realms, ensuring shared governance to protect user capital. This stablecoin represents a transformative step towards a more inclusive, transparent, and resilient financial future, breaking away from the constraints of traditional finance.
Meanwhile, stablecoin holders bear the full brunt of the associated risks. This misalignment between profit and risk has reached its peak.
Usual introduces a new way to share the value created by users, for users. Instead of privatizing profits, Usual socializes the value generated, redistributing power and benefits to the community. Usual introduces one of the first models where users can benefit from the success of the issuer they use and trust.
Welcome to a new era of efficiency, security, and fairness.
Usual serves as a crucial connector between traditional finance (TradFi) and decentralized finance (DeFi). Through its stablecoin, USD0, Usual enables the seamless integration of RWA token liquidity from platforms like , (TBD), (TBD), (TBD), (TBD), (TBD), (TBD) and others. This facilitates DeFi participants' exposure to these assets, marking a significant advancement in bridging the gap between TradFi and DeFi and enhancing overall efficiency and integration.
Much like commercial banks, fiat stablecoins privatize the profits generated from user deposits. With the rise in monetary interest rates, the have surpassed even the giants of traditional finance.
