Operation Mechanism and Risk Analysis of USUAL protocol

The USUAL protocol is a high-risk project that uses US Treasury bond yields as a gimmick. This protocol has a total of five tokens: USUAL (governance token), USD0 (stablecoin), USD0++ (4-year Treasury bond token), USUALX (staked version of USUAL), and USUAL* (exclusive token for the team and investors).

The project party claims to provide users with a stable return of 4%, but in reality, it attracts investors through the emission of up to 70% USUAL tokens. Although USD0++ is minted at a price of 1 dollar, it is actually a government bond token locked for 4 years, currently valued at about 0.84 dollars. To eliminate users' concerns, the project party once allowed a 1:1 redemption of USDC and fixed the oracle price of USD0++ at 1 dollar on a certain lending platform.

This practice has led some investors to have the illusion that USD0++ can be redeemed for 1 dollar at any time, resulting in high leverage operations. However, the project party suddenly closed the 1:1 redemption channel, reducing the redemption price to 0.87 dollars, causing significant losses for many investors.

When the TVL reached nearly $2 billion, this move secured approximately $260 million in funding for the protocol. The project team claims that this funding will be allocated to USUALX holders, but in reality, the USUAL* tokens held by the team and investors are the biggest beneficiaries. USUAL* enjoys minting tax rights and 50% of the fee distribution, with the team holding 60% of USUAL*, which alone has already generated a profit of $72 million.

The reason the project party takes these measures is to maintain the operation of the Ponzi structure. The price of USUAL continues to decline, and without action, the protocol may fall into a death spiral. By initiating profit sharing and imposing a 13% tax on TVL, the project party aims to stabilize TVL and increase the demand for USUAL, thereby prolonging the duration of the scam.

However, this practice sacrifices the interests of all participants. USD0++ holders are taxed at 13%, leveraged traders suffer huge losses, and the related LPs are also affected. The only beneficiaries are the project parties.

For investors who have not yet been exposed to USUAL, it is recommended to stay away from this project. Investors who are already involved can choose to accept losses or continue participating, but should be aware of opportunity costs. In an environment lacking regulation, project teams may not be bound by ethical constraints, and investors should proceed with caution.