Usual Protocol Experiences Sell-Off After Controversial Token Update
Usual Protocol, a decentralized finance (DeFi) platform, experienced community backlash after altering the yield-generating token mechanism. Key points include:
- The USD0++ token fell below $0.90 from its $1 peg on Curve.
- The governance token, USUAL, dropped 17% before recovering.
- A new "dual-path exit" feature allows early redemption of USD0++ at a lower price or at par with reduced rewards.
- This change caught investors off-guard, leading to significant sell-offs.
- Total value locked (TVL) surged from under $300 million in October to $1.87 billion earlier this week.
- Criticism arose for sudden changes without adequate communication.
- Usual Protocol stated that design changes were communicated since October and acknowledged misunderstandings regarding the protocol’s mechanisms.
Current trading for USD0++ is around $0.91, with TVL now below $1.6 billion.