Usual Protocol, a rising star in the decentralized finance (DeFi) sector, experienced a significant backlash following an update to its yield-generating token, USD0++. The token, which is a staked version of the $1-anchored stablecoin USD0, briefly fell below 90 cents on Curve, a decentralized marketplace. This drop was triggered by a change in the redemption mechanism introduced by the team, which allowed early unstaking at a discounted rate. The protocol’s governance token, USUAL, also saw a sharp decline of up to 17% before recovering some losses. The update, which was meant to provide flexibility, instead caused confusion and a sell-off among investors and liquidity providers. Despite the team’s claim of prior communication, the abrupt implementation led to criticism for lack of clarity. The total value locked (TVL) in the protocol, which had soared to $1.87 billion from less than $300 million in October, dropped below $1.6 billion following the update.
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