The post Stablecoin developer Usual faces backlash after changing redeem function appeared on BitcoinEthereumNews.com.

Stablecoin developer Usual is under scrutiny after changing 1:1 redemption mechanism for USD0++, its yield-bearing staked token tied to the USD0 stablecoin. USD0++, the staked version of the USD0 stablecoin by Usual, dropped to $0.92 — 8% below its previous redemption value — after new early exit options triggered a sell-off and disrupted its largest Curve pool. USD0++ is not a stablecoin. It is a staked version of USD0, designed to lock funds for four years while earning USUAL tokens as rewards. Previously, USD0++ could be redeemed 1:1 with USD0, but now users must choose between two exit options: a conditional exit, redeeming 1:1 but forfeiting part of accrued rewards, or an unconditional exit at a floor price starting at $0.87 and gradually increasing to $1 over four years. So @usualmoney team has been claiming for a few weeks that USD0++ was redeemable for 1:1 USD0 so everything was chill. Today, they stopped the 1:1 redeem function without any prior announcement to trap farmers and keep their TVL. USD0++ is now trading at $0.92. Please send this… pic.twitter.com/aZNArIQoy0 — CBB (@Cbb0fe) January 10, 2025 The changes have turned USD0++ into a mix of a bond and a yield farming tool. While high-risk users can stake USD0 into USD0++ to farm USUAL tokens with high yields, more conservative holders can lock funds for four years to earn a fixed 4% annual yield. As a result, the system’s design creates trade-offs. USD0 holders sacrifice yield for stability, while USD0++ holders lock funds and hope USUAL rewards offset their lost yield, and USUAL stakers capture yields from others while betting on the token’s price appreciation. The recent updates have made USD0++ riskier and less appealing, with long lock-up periods and changing redemption rules making it less attractive than more liquid options, which led…

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Filed under: News - @ January 10, 2025 9:28 am