View source for Usual Money USD0++ Depegging When Backing Removed

{{Imported Case Study With About|source=https://www.quadrigainitiative.com/casestudy/usualmoneyusd0++depeggingwhenbackingremoved.php}}
{{Unattributed Sources}}

[[File:Usualmoney.jpg|thumb|Usual Money Logo/Homepage]]Usual Money pitches their stablecoin as an alternative to incumbents Tether and Circle, allowing holders to gain not just profits but also ownership in the protocol. The token was launched with a 1:1 backing peg. However, at some point in October or November 2024, it appears that the team decided to change this to a 0.87 backing, only intended to be invoked in emergencies. Users complained when this system was implemented in January 2025, and the stablecoin depegged and dropped rapidly. The situation is ongoing and continuing to develop. It is unclear whether the peg will be restored, and it seems that any affected users will retain their losses.<ref name="rektnews-17205" /><ref name="lemiscatetwitter-17206" /><ref name="usualmoneytwitter-17207" /><ref name="togbe0xtwitter-17208" />

== About Usual Money ==
"Stablecoin infra for the un-tethered era. Usual is a secure and decentralized fiat-backed stablecoin issuer that redistributes ownership and value through the $USUAL token."

"Usual is a multi-chain infrastructure that aggregates the growing tokenized Real-World Assets (RWAs) from entities like BlackRock, Ondo, Mountain Protocol, M0 or Hashnote to transform them into a permissionless, on-chain verifiable, and composable stablecoin (USD0)."

"Usual is built around the redistribution of power and ownership to users & third parties, akin to a scenario where Tether’s TVL providers would own the company and the associated revenues."

"Each year, users give billions to fiat-backed stablecoin issuers. Usual reinvents this by providing a bankless account with a more transparent and secure stablecoin, while also offering better opportunities to its users."

"We rebuild Tether infrastructure 100% onchain." "Usual is a versatile multi-chain blockchain infrastructure. It aggregates the Real-World Assets from entities like BlackRock, Ondo, and Hashnote, transforming them into a safer, permissionless, verifiable, and composable stablecoin."

"USD0++, the staked version of USD0, is designed as a collateralized, dollar-pegged token fully backed by real-world assets like U.S. Treasury bills. However, it now imposes a four-year lock-up period, complicating immediate access for users."

== The Reality ==
This sections is included if a case involved deception or information that was unknown at the time. Examples include:

* When the service was actually started (if different than the "official story").
* Who actually ran a service and their own personal history.
* How the service was structured behind the scenes. (For example, there was no "trading bot".)
* Details of what audits reported and how vulnerabilities were missed during auditing.

== What Happened ==
It was revealed that the Usual Money backing would drop from $1.00 to $0.87, triggering a large cascade of effects.
{| class="wikitable"
|+Key Event Timeline - Usual Money USD0++ Depegging When Backing Removed
!Date
!Event
!Description
|-
|January 9th, 2025 2:57:00 PM MST
|An Un-Usual Announcement
|The Usual team posts about a new phase in its protocol with a focus on sustainable growth over a 4-year horizon. They call their token "Stronger Than Ever" and announce their "resiliance against volatility" including "primary exits for USD0++ with 0.87 USD0 floor price via USUAL dAPP". They warn users to "read carefully" as the post contains "[i]mportant details". The initiative describes USD0++ as a stablecoin offering predictable yields and revenue flows, ensuring long-term stability and user incentives. This phase emphasizes user alignment with protocol health, including guaranteed 4-year revenue streams and enhanced benefits for USUAL token holders. Key features include a dual-path exit strategy, offering users flexibility between early unstaking or redemption at a floor price. USD0++ remains fully collateralized by T-Bills, maintaining yields and fundamentals. Usual is integrating with DeFi protocols and launching new products to expand its ecosystem. This transition aims to solidify Usual’s position as a sustainable, high-value DeFi asset with competitive yields and long-term growth potential. As they say, "selling a claim worth at least 1 USD for less would be economically irrational".
|-
|January 10th, 2025 11:15:00 AM MST
|Miscommunication Situation
|"The current situation regarding USD0++ stems from a misunderstanding of the protocol’s mechanisms along with a communication that should have been better articulated. We apologize and we’ll continue to do our best to communicate transparent information to users."
|-
|January 10th, 2025 5:09:00 PM MST
|Usual Money Tweet Update
|"Please find our update about the Morpho markets: Usual asks users to migrate their positions to these new markets as soon as possible for obvious reasons. Rewards for positions in the old markets will be deprecated."
|-
|January 11th, 2025 5:21:00 AM MST
|Adli.eth Liquidations
|It's noted on Twitter that Adli.eth is liquidating multiple positions.
|}

== Technical Details ==
This section includes specific detailed technical analysis of any security breaches which happened. What specific software vulnerabilities contributed to the problem and how were they exploited?

== Total Amount Lost ==
The total amount lost is unknown.

How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?

== Immediate Reactions ==
"One minute, USD0++ was a « money printer go brrr », dollar-pegged paradise.

The next? A four-year lockup with a 13% exit fee if you wanted out early. Redeem now at 87 cents on the dollar, or wait until 2028 to get your whole dollar back.

Hundreds of millions in user funds found themselves trapped in protocols still trading fantasies at a dollar.

Usual Money didn't just move the goalposts - they changed the entire game while players were still on the field."

"The update led to significant volatility in the market, with liquidity providers on platforms such as Curve Finance and Pendle reportedly experiencing sudden shifts that resulted in hundreds of millions in USD0++ leaving the DeFi ecosystem. This exodus raised fears of multimillion-dollar liquidations."

"Throughout this past week, notable developments have emerged surrounding usual usd (USD0), its governance token USUAL, and USD0++. These events follow USD0’s ascent into the ranks of the top ten stablecoins by market capitalization. In a recent protocol update, the team modified the redemption pricing for USD0++. Previously, the token’s unstaking mechanism offered a 1:1 redemption ratio, but this changed with the latest adjustments.

This revision spurred debate, triggering subsequent market activity. On Jan. 9, USD0++ declined by over 8%, falling below the anticipated $1 mark."

== Ultimate Outcome ==
"In response to community concerns, Usual’s decentralized autonomous organization (DAO) announced it would cover any potential bad debt in non-migrable markets up to the current amount."

"According to Coingecko data, its value dipped to $0.905 per coin, and as of Jan. 11, 2025, it stands at $0.939. Meanwhile, the non-staked USD0 has maintained its $1 peg but has seen its market capitalization recede from a Jan. 7 peak of $1.88 billion to $1.54 billion—a $340 million reduction."

== Total Amount Recovered ==
The total amount recovered is unknown.

What funds were recovered? What funds were reimbursed for those affected users?

== Ongoing Developments ==
What parts of this case are still remaining to be concluded?
== Individual Prevention Policies ==
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== Platform Prevention Policies ==
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== Regulatory Prevention Policies ==
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== References ==
<references><ref name="rektnews-17205">[https://rekt.news/unusual-money/ Rekt - Unusual Money] (Accessed Jan 13, 2025)</ref>

<ref name="lemiscatetwitter-17206">[https://twitter.com/lemiscate/status/1877735032195784936 @lemiscate Twitter] (Accessed Jan 13, 2025)</ref>

<ref name="usualmoneytwitter-17207">[https://twitter.com/usualmoney/status/1877870480268390682 @usualmoney Twitter] (Accessed Jan 13, 2025)</ref>

<ref name="togbe0xtwitter-17208">[https://twitter.com/Togbe0x/status/1878054644678545437 @Togbe0x Twitter] (Accessed Jan 14, 2025)</ref></references>