USUAL protocol: a Ponzi Scheme disguised as RWA government bond yields

The USUAL protocol claims to bring a stable yield of 4% from US Treasury bonds to the blockchain, allowing participation without permission. However, in reality, this is a cleverly designed Ponzi Scheme.

The protocol issued five types of tokens:

1. USUAL - Governance Token
2. USD0 - stablecoin
3. USD0++ - 4-year "government bond" token
4. USUALX - USUAL Staking Version
5. USUAL* - Team and investor exclusive tokens

To attract users, the protocol offers a high yield rate of 70%. Users can mint USD0++ at a 1:1 price while receiving USUAL tokens as rewards. Even if the price of USUAL drops, the yield rate remains high.

However, USD0++ is actually a token with a 4-year lock-in period, and its real value, discounted at a 4% yield, is only $0.84. To alleviate user concerns, the protocol allows for 1:1 redemption of USDC and fixes the oracle price of USD0++ at $1 on the lending platform.

This has led some users to have the illusion that USD0++ can be redeemed at a 1:1 ratio at any time. Some people even engage in high leverage operations to obtain higher returns.

However, the protocol suddenly closed the 1:1 redemption channel, reducing the redemption price to $0.87. This means that the project team extracted about 13% of the funds from nearly $2 billion in TVL. High-leverage users suffered huge losses.

The project party claims that these funds will be allocated to USUALX holders. At the same time, the USUAL* tokens held by the team and investors enjoy more rights, including minting tax and 50% fee distribution.

The purpose of this series of operations is to maintain the protocol's operation and prevent a death spiral. However, it is essentially still a Ponzi Scheme, which will ultimately lead to losses for all participants, with only the project party able to profit.

For those who have not yet participated, it is advisable to stay away from this protocol. Users who have already participated can choose to cut their losses and exit, or continue participating until the end, but need to be aware of the significant opportunity cost. In an unregulated environment, project parties often lack ethical constraints.