What Sets Usual Apart in the Stablecoin Arena?

Usual has made a swift ascent to become a frontrunner in the stablecoin market, drawing in substantial interest and investment. Just recently, Binance Labs injected $10 million into Usual during its Series A funding round, with involvement from other industry heavyweights like Kraken Ventures. This investment is pivotal for Usual, which already boasts over $1.4 billion in total value locked (TVL), placing it among the top five stablecoins worldwide.

How Do Tokenized RWAs Enhance Stability?

What Exactly Are Tokenized Real-World Assets?

Tokenized Real-World Assets (RWAs) are digital representations of physical assets, including real estate, commodities, or U.S. Treasury Bills. Usual incorporates these RWAs into its ecosystem, resulting in a stablecoin dubbed USD0. Unlike conventional fiat-backed stablecoins, USD0 is permissionless, on-chain verifiable, and completely backed by short-term bonds.

Why Are RWAs More Reliable?

RWAs provide a more stable store of value than fiat-backed stablecoins. They are linked to real or highly dependable assets, making them less prone to inflation and volatility that often accompanies fiat currencies. For instance, stablecoins underpinned by assets like gold can serve as a buffer against inflation, since gold has traditionally been a stable reserve.

What Role Do RWAs Play in Usual's Model?

Usual aggregates assets from well-respected entities like BlackRock, Ondo, and Mountain Protocol, increasing the liquidity of assets that are usually illiquid. This innovation broadens access to these assets for a larger pool of investors and enhances liquidity within the DeFi sphere. However, the integration of RWAs into DeFi has faced hurdles, with fewer than 5,000 holders currently possessing RWA assets on the mainnet.

What Advantages Come with Usual's Decentralized Governance?

How Is Usual Governed?

Usual boasts a completely decentralized governance model, enabling users to partake in decision-making. Holders of the governance token, $USUAL, influence crucial choices like liquidity incentive strategies and risk policies. This community-centric approach ensures that the protocol’s triumph is shared among its users.

What Are the Upsides of Decentralized Governance?

Decentralized governance brings a host of advantages, such as transparency, security, and resistance to censorship. It removes the dangers linked to commercial bank reserves and fractional reserve banking, offering a more transparent and secure option for stablecoin users. Nevertheless, decentralized governance models can sometimes be plagued by issues like insider control and low voter turnout, potentially compromising the democratic ethos of governance.

How Does the Deflationary Model Affect $USUAL Tokens?

What Is the Nature of the Deflationary Model?

The deflationary model of $USUAL tokens aims to shrink the total supply over time through mechanisms like token burning. This scarcity may bolster the token's value but also leaves it vulnerable to manipulation by large token holders (whales).

How Does Usual Execute the Deflationary Model?

Usual mints $USUAL tokens based on the amount of USD0 minted, closely linking token issuance to protocol growth. The emission rate of $USUAL is structured to be deflationary, diminishing in relation to the total value locked (TVL) as new deposits are made. This enhances the token's scarcity and value over time.

What Are the Dangers of the Deflationary Model?

While the deflationary model can create value through scarcity, it can also lead to wealth concentration if not meticulously controlled. Large token holders might hoard tokens in anticipation of a deflationary event, only to sell them when scarcity drives prices higher, resulting in price fluctuations and potentially concentrating wealth among these large holders.

What Future Projects Are on the Horizon for Usual?

What's Coming Next for Usual?

As Usual continues to expand, the team is focused on broadening its ecosystem and increasing the uptake of its products. A major upcoming initiative is the launch of the $USUAL governance token, preceded by a campaign called the Usual Pills campaign. Users can accumulate points (Pills) through protocol activities, determining their share of $USUAL tokens during the airdrop.

How Will These Initiatives Affect Usual's Market Position?

Usual's innovative approach to stablecoin issuance, which incorporates RWAs and decentralized governance, positions it competitively against other leading stablecoins in the crypto landscape. Fiat-backed stablecoins like USDT and USDC are highly competitive due to their transparency, regulatory compliance, and stability. However, Usual's unique model offers an attractive alternative that could draw a wider array of users and fortify its market standing.

Summary

Usual is reshaping the stablecoin landscape by incorporating real-world assets into its ecosystem, providing decentralized governance, and adopting a deflationary token model. These innovations not only bolster stability and transparency but also democratize financial access, positioning Usual as a formidable player in the crypto market. As the protocol continues to grow and evolve, it will be fascinating to witness how it influences the future of stablecoins and decentralized finance.