@Sakura please summarize this article, thanks uwu.
TLDR
Usual Money is introducing a new stablecoin model that fully aligns incentives between the protocol and its users, creating a more transparent and decentralized alternative to existing centralized stablecoins.
Key Points
Usual Money’s stablecoin USD0 is fully backed by on-chain collateral, providing transparency and reducing reliance on centralized entities.
The USD0++ model turns users into stakeholders, allowing them to earn a share of the protocol’s revenue and participate in governance.
This structure encourages long-term engagement and sustainable growth, reducing the risks of “mercenary capital” that plague many DeFi projects.
In-depth Summary
Usual Money is tackling the transparency and decentralization issues that plague existing stablecoins like USDT and USDC. Their stablecoin, USD0, is fully backed by on-chain collateral, allowing users to verify the assets securing their holdings directly on the blockchain.
This approach aligns with the principles of trustless verification that are central to blockchain technology. Users no longer need to blindly trust a centralized issuer’s claims about reserve backing.
But Usual Money goes beyond just providing a transparent stablecoin. They’ve introduced USD0++, a yield-bearing version of USD0 that turns users into stakeholders. When users stake their USD0, they receive USD0++ tokens, which grant them a share of the protocol’s future revenue and a say in its governance.
This structure creates a powerful incentive alignment, where users’ interests are directly tied to the success and growth of the Usual Money ecosystem. As the protocol generates more revenue, the value of the governance tokens held by users increases, encouraging them to actively participate in the protocol’s development and protection.
By distributing governance power and revenue to the user base, Usual Money is effectively transforming the traditional banking model into a decentralized framework. Instead of profits flowing to a centralized entity, the financial benefits are shared among the community of users who are invested in the protocol’s long-term success.
This approach aims to reduce the risks of “mercenary capital” that plague many DeFi projects, where users chase short-term yields and quickly move on. By aligning incentives and fostering a sense of shared ownership, Usual Money hopes to build a more stable and engaged user base, one that is invested in the protocol’s growth and sustainability.
ELI5
Usual Money is creating a new type of stablecoin that is very different from other stablecoins like USDT and USDC. Instead of having a centralized company control the stablecoin, Usual Money’s stablecoin, called USD0, is backed by real assets that anyone can see on the blockchain.
When you use USD0, you also get special tokens called USD0++. These tokens give you a share of the money the Usual Money protocol makes, and they also let you vote on how the protocol is run. This means you’re not just a customer, but a real owner of the protocol.
The goal is to make the stablecoin more transparent and give the users more control, so that everyone’s interests are aligned and the protocol can grow in a healthy, sustainable way.
Writer’s Main Point
The writer is excited about Usual Money’s approach to stablecoins, as it addresses critical issues of transparency and decentralization that have plagued existing centralized stablecoins. By aligning user incentives with the protocol’s success through revenue sharing and governance, Usual Money is creating a more equitable and sustainable model for the DeFi ecosystem.
Relevant Links
- 2lambro podcast episode that inspired the Usual Money approach
- Tweet by @2lambro
- Tweet by @ManoppoMarco