What USD0 does
USD0 is a stablecoin issued by Usual Protocol, fully backed 1:1 by short-duration real-world assets — primarily tokenised US Treasury bills held via regulated custodians and RWA partners such as Hashnote and M0. The pitch that sets it apart from Tether or Circle is distribution of the underlying yield: rather than the issuer keeping the interest earned on those Treasury holdings, USD0 can be staked into USD0++, a locked derivative that passes that yield through to holders, denominated in USUAL, the protocol's governance token.
Usual frames this explicitly as a rebuttal to how the two biggest stablecoin issuers operate — both hold vast Treasury reserves against USDT and USDC and keep essentially all the resulting interest income as corporate profit. USD0 instead routes a meaningful share of that yield back to the people actually holding the stablecoin, funded and distributed through USUAL token emissions and protocol mechanics.
Risks
USD0++ is not a simple, freely redeemable stablecoin — it's a locked position with its own exit mechanics, and in early 2025 Usual changed the terms of early redemption in a way that caused USD0++ to briefly de-peg meaningfully below $1, a sharp reminder that yield-bearing stablecoin derivatives carry liquidity and governance risk that plain fiat-backed stablecoins don't. The yield-sharing model also depends on USUAL token emissions and the protocol's own tokenomics remaining sustainable — if USUAL's value falls sharply, the effective yield passed to USD0++ holders falls with it. USD0 itself carries standard RWA risk too: reliance on custodians, off-chain legal structures, and the credit and liquidity of the underlying Treasury instruments, all of which sit outside what a smart contract audit can verify.