The Conspiracy and Traps of the USUAL Protocol: A Ponzi Scheme Dressed in Government Bond Yields

The USUAL protocol appears to be a DeFi project that provides US Treasury yields, but in reality, it is a meticulously designed Ponzi Scheme. This protocol has issued a total of 5 types of tokens, including the governance token USUAL, the stablecoin USD0, the 4-year Treasury token USD0++, the staked version USUALX, and the USUAL* exclusive to the team and investors.

The protocol attracts users to participate by promising a high return of 70%, which is far higher than the traditional 4% yield of government bonds. Users can mint USD0++ at a 1:1 price and receive USUAL tokens as a reward. To eliminate user concerns, the protocol also allows for a 1:1 redemption of USD0++, and locks the price of USD0++ at 1 dollar on the lending platform.

However, this seemingly beautiful mechanism actually hides huge risks. Some users leverage to amplify their gains, but also amplify potential losses at the same time. When the protocol suddenly closed the 1:1 redemption channel, reducing the USD0++ redemption price to $0.87, many investors suffered heavy losses.

This move allowed the protocol to cash out approximately $260 million from a total locked value of nearly $2 billion. The project team claims that these funds will be allocated to USUAL stakers, but in reality, most of the benefits flow to the team-held USUAL* tokens. USUAL* not only enjoys all the rights of USUALX but also receives additional minting tax rights and 50% of the fee distribution.

The reason the project party has taken this extreme measure is to maintain the operation of the Ponzi Scheme. As the price of USUAL continues to decline, the protocol is facing a risk of collapse. By extracting a portion of user funds as "taxes," the project party is attempting to stabilize the USUAL price and maintain a high APY to attract new funds.

This practice essentially sacrifices the interests of all participants. Whether they are USD0++ holders, leveraged traders, or liquidity providers, they all become victims of this eyewash. The only real beneficiaries are the project parties themselves.

For investors who have not yet come into contact with USUAL, it is strongly recommended to stay away from this project. Users who have already participated are faced with the difficult choice of stopping losses and exiting or continuing to take risks. However, in the cryptocurrency market lacking effective regulation, similar unscrupulous projects emerge endlessly, and investors must remain vigilant and act cautiously.