Has the stablecoin of RWA project Usual exploded? Why does the new exit mechanism lead to the decoupling of USD0++

Recently, there has been a shake up in the decentralized finance (DeFi) market, with stablecoin USD0++dropping to $0.94 on decentralized exchanges (DEX), experiencing a 6% decoupling from its expected $1 price. The reason behind this is not only related to the newly introduced "dual exit mechanism" of the protocol, but also reflects its complex token economy model and the game of user behavior.

What are USD0 and USD0++?

USD0 It is an ordinary stable currency whose value is guaranteed by 100% of the US treasury bond bonds. Users can convert USD0 pledge into USD0++, USD0++ The passive benefit key of the entire protocol is that users can receive $USUAL tokens issued by the protocol in return for locking their positions.

However, USD0++ The pledge period is 4 years, during which no interest will be generated, and it functions similarly to a "zero interest bond" rather than a stablecoin. After users lock their positions, they need to wait until the expiration date to redeem at a price of $1. Due to the unconditional 1:1 exit guarantee provided by the early team, this potential long-term lock up condition caught many early freeloader players off guard.

In the current market environment, if calculated based on an annualized return of 4%, the reasonable present value of USD0++should be approximately $0.855.

What is the newly launched 'dual exit mechanism'?

In order to improve the economic model, the team has eliminated the unsustainable model of 'freelancing', and the agreement has decided to charge players who exit and introduce new exit options:

Conditional Exit:

Users can redeem USD0++at a 1:1 ratio, but they need to give up some of the accumulated USUAL rewards. The mechanism is expected to go live next week and may require burning USUAL to activate.

Unconditional Exit:

Users can redeem USD0++at the current fixed price, which is currently set at 0.87 by the official. The price will gradually increase to 1 over time, but it will take 4 years.

After the launch of the new exit mechanism, due to panic (many people are panic about the bottom price of 0.87) and the withdrawal of DeFi players who use leverage to mine, after all, for ordinary investors, it is better to buy treasury bond bonds ETFs or similar products with higher liquidity and more stable yields than to choose to lock up positions for four years.

Therefore, a large amount of USD0++was sold off in the market, causing an imbalance in its proportion in the Curve liquidity pool and resulting in price decoupling.

From the current situation, USD0 There is no problem of insufficient reserves, and the possibility of systemic risk is relatively low. However, it remains to be seen when major players will be willing to enter the secondary market to fill the gap between USD0 market price and anchor pricing in the future.