The Inside Story of the USUAL Protocol: A Ponzi Scheme Dressed in RWA Clothing

The USUAL protocol is ostensibly a physical asset project based on the yield of US Treasury bonds (RWA), but in reality, it is a carefully designed Ponzi Scheme. The protocol has issued a total of 5 types of tokens, each with its specific use:

1. USUAL - governance token of the protocol
2. USD0 - protocol issued stablecoin
3. USD0++ - 4-Year Treasury Bond Token
4. USUALX - Version after USUAL Staking
5. USUAL* - Team and Investor Exclusive Token

The marketing strategy of the protocol team is very attractive: they claim to bring the stable 4% yield of U.S. Treasury bonds on-chain, and it is permissionless. Compared to other RWA protocols that require KYC and large investments, USUAL claims that you can participate and earn a 4% yield with just 1 dollar.

However, for cryptocurrency investors accustomed to high risks and high returns, a 4% yield is clearly not attractive enough. Therefore, USUAL has launched a more enticing 70% yield program: users can mint USD0++(4-year locked government bond tokens ) at a price of $1, while also receiving USUAL tokens as a reward. Even if the USUAL price drops significantly, investors can still achieve substantial returns.

To alleviate investors' concerns, USUAL allows users to redeem USD0++ for USDC at a 1:1 ratio at any time. They have also established various vaults on platforms like Morpho and fixed the oracle price of USD0++ at 1 dollar. These measures create the illusion of a stable price for USD0++ that can be redeemed at any time, attracting many investors.

Some investors started to engage in leveraged trading, using the fixed oracle prices of the Morpho vault, achieving up to 5 times leverage. However, this high-risk operation ultimately led to huge losses.

The USUAL team suddenly closed the USD0++ 1:1 redemption channel, lowering the redemption price to $0.87. This means that the project party withdrew approximately $260 million from a total locked amount of nearly $2 billion ( TVL ). It is said that these funds will be allocated to USUALX holders.

The real beneficiaries are the project party and its investors. The USUAL* tokens they hold enjoy minting tax rights and a 50% fee distribution. Just from this, the team has already made a profit of $72 million.

The reason the project team has taken such extreme measures is that the protocol's Ponzi structure is difficult to maintain. The USUAL price continues to decline, APY is constantly decreasing, and TVL is at risk of loss. By activating the profit-sharing mechanism and imposing a "head-cutting tax" on TVL, the project team is trying to maintain the operation of the protocol and extend the lifespan of the Ponzi scheme.

However, this practice actually sacrifices the interests of all participants. USUAL will ultimately go to zero, holders of USD0++ have lost 13% of their principal, leveraged operators have suffered huge losses, and liquidity providers of Pendle have also suffered significant losses.

For investors who have not yet encountered USUAL, it is advisable to stay away from this project. Investors who have already participated face two choices: accept losses and stop or continue to hold until the end. However, even if they do not lose money, continuing to participate also means a huge opportunity cost. In the cryptocurrency market, which lacks effective regulation, project parties are often not bound by law and have no moral bottom line.