Usual Protocol’s USD0++ Stablecoin Drops to $0.92, Causing Market Turmoil
Usual protocol's USD0++ has lost its peg, trading at approximately $0.92. This asset is a liquid staking derivative of the USD0 stablecoin and not a traditional stablecoin.
Key points include:
- The USD0++ stakers can exit by unstaking back to USD0 at a 1:1 rate starting next week.
- A new exit option allows redemption at a floor price of $0.87 per USD0++, maintaining rewards in USUAL emissions.
- This pricing reflects its nature as a long-term bond with a fair value around $0.855.
- Pendle PT-USD0++ farmers are experiencing losses due to this revaluation.
- Liquidity providers on Morpho have hardcoded prices at parity, leading to market volatility.
- Gauntlet withdrew approximately $43 million from USD0++ markets prior to the news, raising concerns of insider trading.
- USUAL token has dropped by 18.7% in the last 24 hours.
Market reactions highlight the implications of changing exit strategies and liquidity management within DeFi protocols.