USUAL Protocol Revealed: A Ponzi Scheme Dressed in RWA

The USUAL protocol superficially appears to be a Real World Assets project providing US Treasury yield ( RWA ), but it actually conceals secrets. This protocol has issued five types of tokens: the governance token USUAL, the stablecoin USD0, the 4-year Treasury token USD0++, the staked version USUALX, and the exclusive USUAL* for the team and investors.

The protocol promotion can obtain a 4% government bond yield without permission, but in reality, it attracts investors by issuing the governance token USUAL. Investors can mint USD0++ at a 1:1 price while receiving USUAL token rewards with an annualized return of up to 70%. This promise of high returns has attracted many investors.

However, USD0++ is actually a token with a 4-year lock-up period, and its real value is only $0.84. To alleviate investors' concerns, the protocol allows for a 1:1 redemption of USDC and fixes the price of USD0++ at $1 on the lending platform, encouraging investors to engage in leveraged operations.

Not long ago, the protocol suddenly announced the closure of the 1:1 redemption channel, lowering the redemption price from USD0++ to 0.87 dollars. This means that the protocol withdrew about 260 million dollars from a total locked value of nearly 2 billion dollars (TVL). This fund was allocated to USUAL stakers and project parties.

The project team holds a large amount of USUAL* tokens, enjoying minting tax rights and 50% of the fee distribution. Just from this, the team has already profited $72 million. This practice is essentially a Ponzi Scheme, paying early investors' returns with funds from new investors.

When the USUAL price continues to fall and the protocol faces a death spiral, the project team has taken this radical measure to maintain operations. However, this approach sacrifices the interests of all participants, including USD0++ holders, leveraged traders, and liquidity providers.

For investors who have not yet been exposed to USUAL, it is recommended to stay away from this project. Investors who have already participated can choose to cut their losses and exit, or continue to participate until the end. However, it is important to note that even if one does not lose money, long-term participation may still incur significant opportunity costs. In the cryptocurrency market, which lacks effective regulation, investors should remain vigilant and guard against similar high-risk projects.