USUAL protocol: High-risk projects under the banner of RWA

USUAL protocol is a high-risk project that claims to provide US Treasury yield. This protocol issues a total of 5 types of tokens: governance token USUAL, stablecoin USD0, 4-year Treasury token USD0++, staked version USUALX, and USUAL* which is exclusive to the team and investors.

The project team claims to provide users with a permissionless and low-threshold 4% yield on U.S. Treasury bonds. However, to attract more users to participate, the project team has launched a mining mechanism with an annualized yield of up to 70%. Users can mint USD0++ tokens at a 1:1 ratio and receive USUAL tokens as rewards.

This high-yield model has attracted a large number of users to participate, but it also hides huge risks. USD0++ is minted at 1 dollar, but in reality, it is a bond with a 4-year lock-up period, and its current value is only 0.84 dollars. The project parties create the illusion that USD0++ is equivalent to 1 dollar by allowing 1:1 redemption and fixing the price of USD0++ at 1 dollar on lending platforms.

Some users even exploit this mechanism for high-leverage operations to obtain higher returns. However, the project party suddenly announced the closure of the 1:1 redemption channel, and USD0++ can only exit at a price of 0.87 dollars. This means that users suffer a 13% loss of principal, equivalent to the project party cashing out 260 million dollars from nearly 2 billion dollars in TVL.

The project team claims that the funds will be allocated to USUALX stakers. However, the real beneficiaries are the project team and investors. The USUAL* tokens they hold not only enjoy the rights of USUALX but also receive additional minting tax rights and 50% of the fee distribution. The team holds 60% of the total USUAL* supply, which alone has generated a profit of $72 million.

This practice is essentially to maintain the operation of a Ponzi scheme. The price of USUAL continues to decline, and without measures taken, the protocol will fall into a death spiral. By imposing a "head tax" on TVL and opening profit sharing, the project party attempts to stabilize the price of USUAL, attract new funds to enter, and extend the duration of the scheme.

In the end, all participants will become victims. The price of USUAL will eventually drop to zero, causing losses for USD0++ holders, huge losses for leveraged traders, and liquidity providers will also not be spared. The only beneficiaries are the project team themselves.

For investors who have not yet been exposed to USUAL, the wisest choice is to stay away from this project. Users who have already participated need to choose between exiting with a stop loss and continuing to participate. However, even if they do not lose money, continuing to participate also means a huge opportunity cost. In the cryptocurrency field, which lacks effective regulation, project parties are often not bound by legal and moral constraints, and investors need to be extra cautious.