USD0 Alpha (USD0a)

USD0a is the enhanced‑yield mode of USD0: a market‑neutral, value‑accruing USD savings instrument built on Usual Protocol’s stablecoin infrastructure.

USD0a is constructed on a CME‑listed dated futures basis strategy (long spot, short dated futures). It does not rely on perpetual futures funding rates and does not take directional crypto exposure. Instead, yield is driven primarily by the structural convergence of dated futures prices toward spot at maturity (i.e., “basis” carry), which is generally more predictable than volatile perp funding.

Users mint USD0a using USD0 or USDC. USD0a is non‑rebasing: its value accrues through an increasing on‑chain exchangeRate. Over time, 1 USD0a redeems for more USD0, enabling redemption back into USDC at higher amounts as the underlying NAV grows.

USD0a is fully on‑chain, permissionless, and designed to be transparent and composable as a USD savings primitive.

---

Key Facts

• Collateral composition

  • 90% USCC — a regulated basis‑carry fund (long spot BTC/ETH, short CME dated futures)

  • 10% USTB + USDC — U.S. Treasury Bills (via Superstate) and cash‑equivalents, serving as a liquidity buffer

• Design: Non‑rebasing, exchange‑rate accrual (similar to how USUALx appreciates vs USUAL)

• Access: Fully permissionless — no KYC/KYB

• Yield source: CME BTC/ETH basis carry + T‑Bill yield

• Value growth: exchangeRate(t) ≥ 1 — the exchange rate only increases over time as NAV grows

• Redemption: 1 USD0a → USD0 × exchangeRate(t) — redeemable for USD0 at the current exchange rate

• Redemption cycle: Up to 7 days, with an approximately 10% instant liquidity buffer for smaller redemptions

---

How It Works

1. Mint

   • Convert USDC or USD0 into USD0a.

   • Funds are allocated across:

     • USCC (Superstate’s basis‑carry fund), and

     • a USTB + USDC liquidity buffer.

2. Receive

   • You receive USD0a tokens immediately, representing a proportional claim on the underlying reserves.

3. Accrue

   • Yield accrues passively as the underlying NAV increases, which is reflected entirely through a rising on‑chain exchangeRate.

   • No claiming, no manual compounding: the token’s redemption value increases over time.

4. Redeem

   • Redeem at any time to receive USDC plus accrued yield.

   • Smaller redemptions may be fulfilled instantly from the USDC buffer.

   • Larger redemptions settle within up to 7 days, as underlying positions unwind.

This structure provides a transparent, on‑chain, market‑neutral USD savings instrument—extending the USD0 ecosystem beyond T‑Bill yield into enhanced‑return territory.

---

Benefits

• Predictable carry

  • Yield is driven by dated‑futures convergence toward spot at maturity—a structural, well‑understood mechanism—rather than volatile perpetual funding rates.

• Market‑neutral

  • The long spot / short futures construction minimizes directional exposure to BTC and ETH price movements.

• Value‑accruing by design

  • All yield is reflected through the increasing exchangeRate, visible on‑chain.

• Permissionless access

  • Open minting and redemption with no access restrictions, consistent with Usual’s permissionless DeFi infrastructure.

• Liquidity and stability buffer

  • The 10% USTB + USDC allocation provides a liquidity cushion backed by short‑duration U.S. Treasury Bills and cash‑equivalents—the same asset class underpinning USD0.

• DeFi‑compatible

  • The non‑rebasing, exchange‑rate model simplifies integration with lending markets, DEXs, and yield aggregators (no rebase accounting complexity).

---

USD0 vs. USD0a

Feature	USD0	USD0a
Purpose	Settlement asset / stablecoin	Enhanced‑yield savings mode
Value	Pegged 1:1 to USD	Grows via exchangeRate
Access	Free mint / redemption	Mint via USDC/USD0 vault
Yield source	T‑Bills / MMFs (via RWA collateral)	CME basis carry + T‑Bills
Design	Stablecoin (pegged)	Market‑neutral, value‑accruing

USD0a complements the broader Usual suite:

• USD0 is the stable, RWA‑backed settlement layer.

• bUSD0 is the Liquid Bond Token (formerly USD0++), which locks USD0 for USUAL coupon yield.

• USD0a provides a third path: enhanced USD‑denominated yield via a market‑neutral basis strategy—without token locking, exposure to USUAL emissions, or reliance on funding‑rate markets.

---

Relationship to the Usual Ecosystem

USD0a sits within Usual’s Product Offerings Layer, alongside bUSD0 (Liquid Bond Token), sUSD0 (Savings USD0), and the USUAL/USUALx governance and staking stack.

• bUSD0 generates yield through daily USUAL token coupons tied to T‑Bill revenue.

• sUSD0 provides a wrapped yield‑bearing USD0 position.

• USD0a generates yield from an independent source: the CME dated futures basis trade, diversifying protocol yield beyond core RWA collateral.

As a non‑rebasing, exchange‑rate‑accrual token, USD0a follows the same design pattern as USUALx (where the USUALx:USUAL exchange rate appreciates as staking rewards accrue). This makes USD0a immediately familiar to existing Usual users and straightforward to integrate across DeFi.

---

Risks

• Liquidity / forced unwind risk: large redemptions can force early unwind/roll of the carry trade, crystallizing losses or giving up expected carry.

• Basis dislocation risk: even if Δ-neutral, the basis can gap/widen in stress potentially leading to mark-to-market drawdowns and worse exits (could create impermanent losses which resorb by itself at maturity,).

• Redemption timing risk: redeem anytime but can take up to ~7 days; only ~10% is intended as an instant buffer, exits may be delayed under stress.

• Counterparty / execution-chain risk: reliance on USCC + TradFi custody/clearing/settlement/ops introduces operational and counterparty failure modes.

• On-chain wrapper risk: smart-contract bugs plus admin/upgrade/parameter changes affecting exchange-rate accounting or redemption paths.