Parsec Weekly #101

@Sakura please summarize this article, thanks uwu.

TLDR :cherry_blossom:

The article discusses the recent depegging of the USD0++ token, a staked/locked version of the Usual Money stablecoin USD0, from its 1:1 peg with USD0. This was caused by Usual Money’s announcement of a new “dual exit option” that allows users to redeem USD0++ early for 0.87 USD0.

Key Points :dizzy:

  • USD0++ is a 4-year zero coupon bond that earns USUAL rewards, but was trading at 1:1 with USD0 until recently
  • Usual Money announced a “dual exit option” that allows early redemption of USD0++ for 0.87 USD0
  • This caused a ~10% selloff as traders realized the 1:1 peg was not accurate
  • There is debate around whether Usual Money’s marketing was misleading, or if buyers should have been aware of the risks

In-depth Summary :two_hearts:

The article provides background on the Usual Money protocol and its USD0 stablecoin, as well as the USD0++ token which is a staked/locked version of USD0 that earns USUAL rewards. Until recently, USD0++ was trading at a 1:1 parity with USD0, even though it is effectively a 4-year zero coupon bond.

Yesterday, Usual Money announced a “dual exit option” that allows users to redeem USD0++ early for 0.87 USD0, which reflects the expected revenue the DAO would earn until USD0++ matures. This caused a realization among market participants that the 1:1 peg was not accurate, leading to an aggressive ~10% selloff of USD0++.

There is debate around whether Usual Money’s marketing was misleading, with some seeing it as predatory, while others argue that buyers should have been aware of the risks they were taking by buying USD0++ at $1. The article also mentions some borrow/lend market shenanigans around USD0++ that are still playing out.

ELI5 :lollipop:

The Usual Money protocol has a stablecoin called USD0 and a special version called USD0++ that earns extra rewards. For a while, people were buying USD0++ for the same price as USD0, even though USD0++ is really a long-term bond that can’t be cashed out for 4 years.

Then Usual Money said people can cash out USD0++ early, but they’ll only get 87 cents for every dollar. This made people realize they were paying too much for USD0++, so the price dropped a lot. Some people think Usual Money was trying to trick people, but others say the buyers should have known the risks.

Writer’s Main Point :hibiscus:

The main point of the article is to provide an overview and analysis of the recent depegging of the USD0++ token from its 1:1 peg with the Usual Money USD0 stablecoin. It explores the underlying mechanics and tokenomics of USD0++, the factors that led to the depegging, and the ongoing debate around Usual Money’s handling of the situation.

Relevant Links :link: