An unexpected change in the redemption mechanism of the protocol's yield-generating token caught investors off-guard, throwing the DeFi community into disarray.
An unexpected change in the redemption mechanism of the protocol's yield-generating token caught investors off-guard, throwing the DeFi community into disarray.An unexpected update to Usual Protocol's USD0++ redemption mechanism sent its staked stablecoin briefly below $0.90 and caused its governance token, USUAL, to plunge 17% before partially recovering.
Amid the turmoil, the protocol's USD0++ token, which represents a locked-up – or staked – version of its $1-anchored stablecoin USD0, fell brieflyfrom $1 on decentralized marketplace Curve. The protocol's governance token, USUAL, plummeted as much as 17% through the day before recovering some of the losses.in the redemption mechanism of USD0++ token introduced by the team on Thursday that caught investors and liquidity providers off-guard.
However, the new feature called "dual-path exit" will allow investors to redeem the locked-up tokens early at a 0.87 USD0 floor price, or at par, by giving up a part of the rewards earned, calling the 1:1 exchange rate into question."Did they just allow degens to jump in at 1:1 and then rug the USD0++?," prominent DeFi analyst Ignas said in an. "They pushed for the largest USD0/USD0++ pool on Curve knowing all well that USD0++ shouldn't trade at 1:1.
"The current situation regarding USD0++ stems from a misunderstanding of the protocol’s mechanisms along with a communication that should have been better articulated," the statement reads. "We apologize and we’ll continue to do our best to communicate transparent information to users."
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