USUAL protocol: High-risk projects disguised as RWA

USUAL protocol is a high-risk project that claims to be backed by US Treasury yield. This protocol consists of 5 types of tokens: USUAL( governance token ), USD0( stablecoin ), USD0++( 4-year Treasury token ), USUALX( USUAL staking version ), and USUAL*( team and investor exclusive token ).

The project team has come up with an appealing slogan: bringing the stable 4% yield of U.S. Treasury bonds on-chain, with no permission required and no minimum investment threshold. However, a 4% yield is not attractive enough for many cryptocurrency investors.

To this end, the project has launched a more enticing scheme: users can mint USD0++ at a price of 1 dollar, while also receiving USUAL tokens as a reward, claiming to bring a 70% return. Even if the USUAL price drops by half, the annualized return can still reach 28%.

This high-yield model has attracted many novice investors. However, experienced investors may question the associated risks. Although USD0++ is minted at 1 dollar, it is essentially a government bond token with a 4-year lock-up period, and its actual value after discounting at a 4% yield is only 0.84 dollars.

To eliminate investor concerns, the project team allows for the redemption of USDC at a 1:1 price at any time, and has established multiple vaults on a certain lending platform, fixing the oracle price of USD0++ at 1 dollar. This creates the illusion that USD0++ can be redeemed for 1 dollar at any time, leading some investors to begin engaging in high leverage operations.

However, the project party suddenly closed the USD0++ 1:1 redemption channel and lowered the redemption price to 0.87 USD. This means that the project withdrew about 260 million USD from a total locked value of nearly 2 billion USD, causing huge losses for investors.

The project party claims that this fund will be allocated to USUAL stakers ( and USUALX holders ). At the same time, the USUAL* tokens held by the team and investors can also share this portion of the profits, with the team accounting for more than 60%.

The purpose of this series of operations is to maintain the project's operation and prevent a death spiral caused by the continuous decline in USUAL prices. However, this is essentially an act of prolonging the project's life by sacrificing the interests of some participants.

For investors who have not yet participated in USUAL, it is advisable to remain cautious and not to intervene lightly. Investors who have already participated need to weigh whether to continue holding or to cut losses in a timely manner. In the cryptocurrency market, which lacks effective regulation, the behavior of project parties often lacks moral constraints, and investors need to be vigilant and carefully assess risks.