Usual Protocol USD0: RWA Stablecoin Guide
Learn Usual Protocol USD0. Real World Asset stablecoin backed by US Treasuries and bonds. Earn 4–5% yield on stablecoins.
What is USD0?
USD0 is ERC-20 stablecoin backed by Real World Assets (RWAs): US Treasury bonds, government securities, cash deposits. Unlike USDC (cash-only), USD0 holds interest-bearing assets, distributing yield to holders.
Value: 1 USD0 = 1 USD. Backing: 110%+ overcollateralized with US Treasuries earning 4–5% annually. Yield: protocol distributes bond interest to USD0 holders.
USD0 vs USDC: Stablecoin Comparison
| Feature | USD0 | USDC |
|---|---|---|
| Backing | US Treasuries (4–5% yield) | Cash + short-term securities (0%) |
| Yield | 4–5% APY | 0% (no yield) |
| Governance | DAO (community voting) | Centralized (Circle Inc.) |
| Custody | Regulated banks (Fidelity) | Regulated banks (Silvergate) |
| Liquidity | Growing (DEX trading) | Excellent (all exchanges) |
| Risk | RWA custody, DAO governance | Centralized issuer risk |
How USD0 Treasury Works
Usual Protocol purchases US Treasury bonds maturing in 0.5–3 years. Average yield: 4.5%. These Treasuries held in custody accounts at Fidelity and other regulated banks.
As bonds earn interest, protocol distributes yield to USD0 holders. Mechanism: USD0 supply increases (rebase) OR holders receive USUAL token rewards (governance token).
Treasury Composition (Example)
50% US Treasury bonds (4.5% yield)
30% Short-term deposits (4.2% yield)
20% Cash reserve (0% yield, for redemptions)
Blended yield: ~3.5–4.5% annually distributed to USD0 holders
Earning Yield on USD0
- Hold USD0: Buy USD0 on Uniswap, Curve, or other DEX. No special staking needed.
- Passive yield: As protocol's Treasuries earn bond interest, your USD0 balance increases or you receive USUAL rewards.
- Liquidity provision: Provide USD0/USDC liquidity on Uniswap. Earn swap fees (0.05%) + USD0 protocol yield.
- APY breakdown: 4–5% from bond interest + 0.05% from LP fees = 4–5% total APY on USD0 holdings.
Real World Asset (RWA) Risks
Custody risk: Treasuries held at Fidelity and banks. If institution fails, funds at risk (but FDIC insured up to $250k).
Interest rate risk: If Federal Reserve raises rates above 5%, older Treasury bonds decline in value. Protocol rebalances, potentially reduces yield.
Regulatory risk: If SEC/Treasury restricts RWA tokens, USD0 trading could be halted. Unlike USDC (regulated), USD0 governance model creates regulatory uncertainty.
Usual Protocol DAO Governance
Community votes on treasury allocation: which Treasuries to buy, yield distribution (rebase vs USUAL rewards), risk parameters. USUAL token holders vote. Decentralized decision-making vs centralized USDC/USDT.
Redemption and Liquidity
1 USD0 redeemable for 1 USDC. Redemption timeline: 1–2 days (due to RWA custody settlement). For immediate liquidity: trade USD0 on DEX (minimal slippage if high liquidity).
Key Takeaways
- USD0 is stablecoin backed by US Treasuries earning 4–5% yield
- Hold USD0 = earn protocol yield automatically (no staking required)
- More decentralized than USDC (DAO governance) but newer (regulatory risk)
- Best for: long-term stablecoin holders seeking yield; not for short-term trading
Educational disclaimer: This guide is for informational purposes only and does not constitute financial advice. Crypto involves significant risk — do your own research before making any decisions. Learn more about our team.
Educational disclaimer: This guide is for informational purposes only and does not constitute financial advice. Crypto involves significant risk — do your own research before making any decisions. Learn more about our team.