I just scrolled through and found an interesting perspective on Usual, the trending stablecoin protocol. So before we dive deeper, it’s really important to understand what Usual means in this crypto context.

So, Usual actually has two main roles. First, it’s a protocol that issues USD0, a stablecoin fully backed 1:1 by real-world assets (RWA) without requiring special permission. Second, USUAL is a governance token that allows the community to steer the protocol’s development direction. With this understanding, it’s now clear what they’re trying to do.

Now, you might ask, do we really need a new stablecoin? The market is already dominated by Tether and Circle, with valuations exceeding $200 billion USD. But here’s the interesting problem. In 2023, those two giants generated over $10 billion USD in revenue, but liquidity providers? They don’t get a share of those huge profits. A model that privatizes profits but shares risks with the public clearly contradicts the spirit of DeFi. What does Usual as an alternative mean? It’s an effort to change that paradigm.

Furthermore, even though RWA is hot in crypto, US government bond products still have fewer than 5,000 holders on mainnet. This shows that integrating RWA and DeFi still faces many challenges. Plus, DeFi users generally want to share in the success of the projects they support, but existing reward models often ignore the risks early users bear.

From this, Usual proposes three unique values. First, full on-chain stablecoin governance. Unlike traditional centralized stablecoins, decisions about risk policy, collateral types, and liquidity incentive strategies are entirely in the hands of the token-holding community. This ensures neutrality and transparency.

Second, solving the bankruptcy isolation problem. Traditional reserve stablecoins are often stored in commercial banks, exposing them to partial reserve risks like those seen with Silicon Valley Bank. Usual takes a different approach with direct links to short-term government bonds and strict risk policies, ensuring 100% asset backing.

Third, redefining ownership and revenue sharing. Users don’t just earn yields from collateral, but more importantly, they have full control over the protocol, treasury, and future revenue through governance tokens.

The Usual product scheme has three components. USD0 is the foundation—safe and stable, the first RWA stablecoin combining various US government bonds. This design isolates it from traditional banking system bankruptcy risks and avoids systematic risk.

Then there’s USD0++, an innovative product that’s basically an enhanced government bond. Users lock their principal in USD0 for 4 years and receive dual income streams. The first layer is the base yield from bonds, guaranteed through the BIG mechanism. The second layer is incremental revenue from protocol growth paid in USUAL tokens. The 4-year timeline aligns with US government bond maturities and provides enough time for protocol development.

The USUAL token itself is the core governance token with a sophisticated value capture mechanism. Holders don’t just vote; their voting weight is linked to their contribution to the protocol. All revenue from protocol fees directly support USUAL’s value. Plus, there’s a staking mechanism for continuous revenue sharing, and a deflationary design to ensure long-term value appreciation as AUM grows.

From a valuation perspective, there are several key dimensions. The current market cap of USDT and USDC combined has already surpassed $185 billion and $78 billion USD respectively, with annual revenues over $10 billion. If Usual can capture even 5% of this market share, its valuation would be significant. Also, the growth potential of the RWA sector is massive as traditional finance gradually enters the crypto space.

Of course, there are risks to watch out for. Regulatory uncertainty is the most obvious, given increasing global financial oversight. Market education costs can’t be ignored either, because this complex model requires substantial resources for user education. Plus, competitive risk—once this model proves successful, more competitors will likely emerge.

Overall, Usual represents an important exploratory direction in the era of DeFi 2.0. It’s not just copying existing models but attempting to solve real problems through technological innovation. For long-term value investors, this is definitely worth attention. But still, allocate your positions rationally according to your risk capacity and investment cycle, and manage risks carefully.