Usual Money’s USD0++ stablecoin, which is backed by U.S. Treasury bonds, experienced a significant drop in value after a recent update, falling from $1 to $0.915, resulting in an 8.5% loss. This decline has sparked discussions within the altcoin community regarding the stability and trustworthiness of the asset.
The transition to the new structure for USD0++ is the main cause for this decline. USD0++ differs from Usual Money’s core stablecoin, USD0, and operates similarly to a zero-coupon bond, maturing into the protocol’s main asset, USUAL, over a period of four years. Financial expert mytwogweis has pointed out that as of today, USD0++ should have a fair market value of approximately $0.855. Buying at $0.855 and holding for four years can yield a risk-free return of $1.
Previously, the USD0++ coin could be exchanged 1:1 for USD0. However, with Usual Money’s recent announcement, this has changed. Coin holders must now choose between two new exit routes: an early redemption at a 1% yield loss or selling at a base price of $0.87, which will gradually increase to $1 over the next four years.
The changes have received negative reactions from some members of the altcoin community, as they argue that USD0++ was marketed as a stable asset pegged to $1. A user named Olimpio expressed their dissatisfaction, stating that “They have abruptly fixed the USD0++ coin at a base price of $0.87, resulting in a total loss of $1.5 billion.” Another community member criticized the Usual Money team for previously claiming that USD0++ could be exchanged at a 1:1 ratio with USD0, only to suddenly remove that functionality, leaving users in a difficult position to preserve the value of their locked assets.
On the other hand, some community members believe that this change may prove beneficial in the long run. User May Mei commented, “USD0++ is essentially a four-year bond for USD0. It yields returns in USUAL daily. Yes, it seems like an abrupt decision, but it might be advantageous in the long term.”
Following the update, USD0++ holders have taken action to exit, causing a 92% imbalance in the liquidity pools involving USD0 and USD0++ coins.
In December, Usual Money introduced a new reserve model and launched a new stablecoin project called UsualM. The project received support from a $10 million investment round led by Binance and Kraken.