In a significant move to stabilize its ecosystem, Usual Protocol has announced the activation of its revenue switch following the depegging of its stablecoin, USD0++, from the $1 mark. On January 9, USD0++ was reported as low as $0.89, raising considerable concerns among investors and users.
The decision to implement a revenue-sharing model aims to address community backlash and restore confidence in the protocol. Starting from January 13, Usual Protocol plans to distribute its earnings derived from real-world assets and operational protocols weekly, anticipating approximately $5 million in monthly revenues. This translates to an impressive annual percentage return of over 50% under current conditions.
The introduction of the revenue switch demonstrates a proactive approach to showcasing the tangible value of the USUAL token and the importance of maintaining a balanced economic model. Usual Protocol has emphasized that this initiative is crucial not only for restoring trust but also for improving the overall reliability of their offerings in the decentralized finance (DeFi) space.
Alongside the activation of the revenue switch, the team has also confirmed the launch of a 1:1 Early Unstaking feature, allowing users to redeem their USD0++ tokens at a $1 peg. However, users will need to forfeit a portion of their accrued rewards as a form of penalty. This dual mechanism for redemption is designed to provide users with flexibility amidst the ongoing changes in the value of USD0++.
Despite the strategic moves by Usual Protocol, the recent updates have sparked a heated debate within the DeFi community. Criticism from notable figures, including Stani Kulechov, the founder of the Aave platform, and Michael Egorov, founder of Curve Finance, has underscored concerns regarding the governance processes and the unanticipated changes made to the USD0++ redemption scheme. With investors experiencing multimillion-dollar liquidations and liquidity shifts, the path towards stabilization for the Usual Protocol remains closely watched by the broader market.
As Usual Protocol implements these measures to counteract the effects of the USD0++ depeg, it is crucial for the community to stay informed and engaged in the evolving landscape of decentralized finance.
