Usual: USD0 always maintains redeemable 1:1 collateral and strong secondary liquidity

The official announcement from Usual states that yesterday (World Standard Time December 31, 07:00 AM), the Usual protocol experienced a massive sell-off of USD0 triggered by a single whale trade in the secondary market, which raised doubts among users about the pegging of USD0 to the US dollar. USD0 briefly fell to $0.99 due to continuous selling, causing some basis point deviation, but quickly recovered full pegging. All US dollar stablecoins on the market will have price fluctuations around $1 per few basis points, which is a normal phenomenon brought about by the mechanism of US dollar stablecoins.

USD0 can always be redeemed at a 1:1 ratio with its underlying collateral to ensure the solvency of the Usual protocol. The exchange is handled through smart contracts and any entity on our whitelist can currently access it; our ultimate goal is for it to be completely permissionless. USD0 also has strong secondary liquidity; secondary liquidity of collateral depends on tokenized RWA issuers such as USYC chosen by Usual, Ethena's USDTB, Securitize's BUIDL fund under BlackRock, Ondo's OUSG and other diversified assets ensuring multiple exit routes and optimal liquidity. This event was a significant stress test for USD0’s pegging to the U.S Dollar; Usual remains robust and will always focus on system stability.