Usual Governance

Usual aims to establish a fair and equitable redistribution of power to its users. Initially, governance will be managed to ensure a structured launch and operational stability.

Over time, the protocol will transition toward a decentralized governance model, progressively returning authority to users who actively contribute to the system’s value.

This transition fosters robust neutrality and resilience through decentralization. Gov- ernance will ultimately reside with the Usual DAO, which is driven by staked USUAL (USUALx) and USUAL* holders (as well as USD0++ in the preliminary governance voting). These stakeholders are empowered with voting and proposal rights, enabling them to shape the DAO’s operations, strategic direction, and investment policies.

This framework ensures that control is aligned with the ecosystem’s long-term sustainability and user-centric ethos.

Governable Aspects

The governance roadmap is maturing and taking form as development continues. How- ever, it is established that the DAO will oversee key aspects of the protocol. Holders of USUALx and USUAL* will have the ability to propose and vote on changes to the following areas:

• Parameters Set by the DAO: This includes parameters impacting the various mechanisms for USUAL and other products (USD0++ and Liquidity Provision Incentives), fees for operations like redeeming and unstaking, and other adjustable parameters.

• Onboarding of New Collateral or Assets: The DAO decides which collateral can be accepted and can further decide which assets can be converted to LDTs within Usual, such as ETH (staked ETH), sDAI, sUSDe, or other tokens. The DAO therefore has domain over the direction and expansion of the protocol.

• DAO Treasury Management: The DAO manages the treasury, determining investment strategies, allocations (i.e. insurance fund), and the distribution of proceeds to USUAL holders (via future features—buyback and burning of USUAL, etc.).

Preliminary Governance Voting (and future evolution)

Usual’s first governance proposal (UIP-1) recently introduced a preliminary voting structure, as the protocol does not yet have a fully developed governance process for proposal creation, voting, and execution. This initial framework will be evaluated and refined before finalizing the governance system.

Preliminary Voting Power Distribution:

• USUALx: 40% of total voting power

• USUAL*: 40% of total voting power

• USD0++: 20% of total voting power

This structure differs from the originally planned governance system, which was expected to rely solely on USUALx and USUAL*. The protocol team will continue refining the governance model, and it is important to note that both the current voting structure and overall governance process are subject to change.