Usual Protocol has launched its Revenue Switch, a mechanism designed to allocate 100% of protocol revenue to USUALx stakers in USD0 stablecoins. This move is seen as a significant advancement for decentralized finance (DeFi), but it comes amid ongoing debates surrounding changes to the protocol’s redeem function.
Activated on January 13, 2025, the Revenue Switch aims to distribute an estimated $5 million per month in USUAL token-generated revenue directly to stakers. This mechanism ties token value directly to earnings, promoting long-term staking and supporting sustainable growth for the protocol.
As of January 14, 2025, the USUAL token is trading at $0.5319, with a market capitalization of $275.68 million and a 24-hour trading volume of $194.6 million. Approximately 36.53% of the token supply is staked, offering an annual yield of 275%, which includes 42% in USD0 rewards and 233% in USUAL tokens.
Despite the excitement surrounding the Revenue Switch, Usual Protocol has faced criticism regarding its updated redeem function for USD0 stablecoins. The new function allows for temporary suspension of redemptions under specific circumstances, such as during periods of market volatility or liquidity constraints. While USUAL has assured that this change aims to maintain stability in extreme scenarios, it has sparked concerns over the concentration of control and potential implications for decentralization.
This latest development is part of Usual Protocol’s broader strategy to solidify its position as a leading DeFi protocol. The Revenue Switch seeks to enhance the utility of USUAL tokens, stabilize returns for stakers, and offer a transparent mechanism for revenue distribution. Additionally, the protocol plans to refine its model further in the coming months, incorporating advanced staking and governance frameworks inspired by the “veModel” used in other successful DeFi projects.
As Usual Protocol navigates these changes, the success of the Revenue Switch could serve as a benchmark for revenue-based tokenomics, potentially shaping future practices in the DeFi space. The protocol’s ability to address community concerns will be closely monitored, as it could impact trust and adoption in the competitive DeFi ecosystem.
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