Usual (USD0 / USD0++)

Our research assessment remains adverse. The original thesis correctly identified mutable redemption terms but overstated several incident facts that the available primary record does not prove, including a January 10 effective date, more than $200M of Morpho borrows and losses to unlevered holders from liquidations. Usual announced on January 9, 2025 that it would replace the unconditional early 1:1 USD0++ exit with a 0.87 USD0 floor plus a 1:1 route that required a USUAL-token contribution. Its January 14 update acknowledged that exit liquidity had been heavily impaired and that residual USD0/USD0++ pool liquidity had remained below $20M after sell-offs and withdrawals. The product later became bUSD0 under UIP-12, but the key issue did not disappear: current governance documentation says the DAO can set the early-exit floor, now 0.92 USD0, and redemption fees. A locked RWA-backed claim whose terms governance can change is not equal to USD0 at par. Direct USD0, USDC or a separately approved savings token offers a clearer exit. Audits cannot make changeable economic terms permanent.

Review triggers: events that reopen the verdict
• The live bUSD0 contract enforces one USD0 of net primary redemption value without requiring purchase or burn of another token for 12 consecutive months
• Every floor, fee, pause, upgrade, maturity and rt-bUSD0 authority is published and reconciles to executed contracts and governance proposals
• Daily reserve composition and liabilities reconcile to independent attestations for 12 consecutive months
• Existing holders receive an enforceable notice and par-exit window before any redemption term changes
• Proposed-size primary redemption and secondary sale each pass the written time and slippage limits during a stressed-liquidity test

Watched nightly: a warning on its venues or files, or a cited document that changes, reopens the memo. The first confirmation is due 2026-11-14.

The research file

Mechanism and lifecycle

USD0 is Usual’s fiat stablecoin claim backed through approved tokenized real-world assets. USD0++ was created by locking USD0 until June 30, 2028 in exchange for USUAL rewards and protocol-yield economics. Early 2025 primary materials described two exits before maturity: a floor redemption for less than one USD0, initially 0.87, or a 1:1 early unstake that required a dynamically calculated contribution of USUAL. UIP-12 later renamed USD0++ to bUSD0 and introduced rt-bUSD0 as a separate token for early-exit rights. The current technical documentation still shows an early redemption function that transfers USUAL. This memo follows that successor instrument because the economic claim and governance-controlled exit remain; it does not treat the old ticker as a second allocation.

Governance and control

Usual documentation identifies USUAL and staked USUALx as the main governance assets and describes proposal, discussion, voting and execution stages. Governance can change token emissions, redemption and unstaking fees, collateral-provider rewards, collateral-provider admission, insurance-fund terms and the minimum primary-market bUSD0 early-exit value, now documented as 0.92 USD0. The January 2025 roadmap described a proto-governance model in which contributor proposals would take effect unless vetoed; current documents describe the later shift toward holder governance. That history matters but does not change the holder’s reliance on those in control: authorized governance can change the price or cost of an early primary exit, the assets backing USD0 and treasury support policies.

January 2025 terms event

On January 9, 2025 Usual publicly announced two primary exits for USD0++: a 0.87 USD0 floor in the application and a forthcoming 1:1 early unstake that required a USUAL burn. It warned highly leveraged USD0++/USDC Morpho users to increase their health factor during expected volatility and distinguished hardcoded-price markets scheduled for migration. On January 14, Usual said the 1:1 burn route was live, its USUAL cost would vary with rolling net redemptions and was capped by six months of rewards. The same update stated that residual liquidity in the USD0/USD0++ pool had stayed below $20M after large sell-offs and liquidity withdrawals. These facts come from the issuer. They show a governance-and-liquidity event, but they do not prove every liquidation or loss number circulated in secondary commentary.

Backing, assurance and unresolved record

The terms event did not show that USD0 reserve assets had defaulted or that attackers had exploited the token contracts. Usual said USD0++ remained backed by USD0 and continued to describe USD0 as collateralized by approved tokenized Treasury assets. The risk was a mismatch between the economic redemption terms of a locked claim and the market’s expectation of liquidity at par. Smart-contract reviews can assess access controls and implementation, but they cannot stop an allowed governance action from changing a floor, fee or collateral policy that governance controls. Current documentation also shows that the product changed through UIP-6 and UIP-12. A future review must trace every successor contract and proposal instead of assuming that the USD0++ terms or ticker stayed unchanged after the 2025 event.

Exit, liquidity and alternatives

A holder may sell on a secondary pool, accept the governance-set floor, use the USUAL-funded early redemption route, hold to maturity, or use any successor rt-bUSD0 mechanism after verifying its exact rights. Each path has a different cost: secondary slippage and depth, a haircut to USD0, exposure to the price and availability of USUAL, or a time lock. A token used as collateral can also be liquidated when its market or oracle value falls, but leverage losses belong to the borrower and the lending-market design and do not prove a loss of reserve backing. Direct USD0 is the closest alternative in the same system because it removes the locked reward layer. USDC provides a more liquid, issuer-controlled dollar alternative; an approved sUSDS position is the relevant savings-token comparison when yield is required. Each still needs its own issuer and protocol review.

Observable reopening conditions

Reopen for bUSD0 only after a complete package of enforceable rights identifies the live token, maturity, floor, rt-bUSD0 rights, fee formula, governance delay and every pause or upgrade authority. The minimum primary exit must remain at one USD0 after all fees for at least twelve consecutive months, or an immutable right controlled by the holder must enforce that result without buying or burning another volatile token. Publish daily reserve composition and liabilities, independent attestations, and proposed-size primary and secondary redemption tests through a stressed market. Any future change must provide an enforceable notice and holder exit window before it binds existing positions. Without those observations, we should keep the adverse research assessment and not consider the product for selection.

Sources

The claims above trace to these. Where a number could not be independently verified, the thesis says so.

• Usual — January 9, 2025 USD0++ four-year and exit announcement · primary · accessed 2026-08-14
  Supports: 0.87 floor announcement, 1:1 USUAL-burn route, Morpho collateral warning, June 2028 lock
• Usual — January 14, 2025 early-redemption and liquidity update · primary · accessed 2026-08-14
  Supports: live 1:1 early unstake, dynamic USUAL contribution, six-month reward cap, sub-$20M pool liquidity
• Usual documentation — governance authorities and lifecycle · primary · accessed 2026-08-14
  Supports: governable redemption fees, 0.92 bUSD0 floor, collateral admission, UIP-6, UIP-12, governance process
• Usual technical documentation — bUSD0 early redemption · primary · accessed 2026-08-14
  Supports: USD0++ renamed bUSD0, USUAL-transfer redemption function, contract mechanism
• Usual — UIP-12 bUSD0 and rt-bUSD0 proposal · primary · accessed 2026-08-14
  Supports: product renaming, rt-bUSD0 right, successor lifecycle, governance action
• Usual — January 23, 2025 road-to-parity and governance roadmap · primary · accessed 2026-08-14
  Supports: $250M early redemption, proposed 0.92 floor, veto governance, liquidity response
• Usual — USD0++ early-redemption mechanism paper · primary · accessed 2026-08-14
  Supports: June 2028 maturity, USUAL contribution, 1:1 early redemption design, reward-linked exit cost

Inherited controls

The research above describes the protocol layer. Every position also inherits the asset it holds and the chain it settles on. The layer with the most administrative power sets the position’s effective control; that describes control, not quality or suitability.