Usual Protocol activates revenue switch amid redeem function debate

Amid growing concerns, will Usual be able to deliver on its revenue replacement promises?

Revenue Key, a mechanism designed to distribute 100% of Usual’s (USUAL) protocol revenue to USUALx stakers, was launched by the creators of the USUAL token and the USD0 stablecoin ecosystem. While the initiative is a significant step forward for decentralized finance, its first step is accompanied by ongoing community concerns regarding recent changes to the protocol’s redemption function.

Activated on January 13, 2025, the Revenue Key allows USUALx stakers to directly receive $0.1 in revenue generated by the protocol, estimated at $5 million per month. This mechanism links token value to real earnings, aiming to encourage long-term staking and support sustainable protocol growth.

As of UTC+0 today, Revenue Key has been activated for USUALx holders. Those who hold USUALx positions throughout this week will be entitled to the distribution of last week’s margin proceeds.
​
More details here and on the dApp: https://t.co/syOdYwHXW5
​
1:1…

— Usual (@usualmoney) January 13, 2025

As of January 14, 2025, the USUAL token is trading at $0.5319 with a market cap of $275.68 million and a 24-hour trading volume of $194.6 million. Approximately 36.53% of the token supply is staked, offering 275% annual returns, 42% in USD0 rewards, and 233% in USUAL rewards.

ORDINARY 1D table | Source: CoinmarketCap

Despite the excitement surrounding Income Key, the protocol has faced criticism for its decision to update redemption functionality for USD0 stablecoins. The new feature allows redemptions to be temporarily suspended under certain conditions, such as market volatility or liquidity constraints. Although USUAL clarified that this change was intended to maintain stability in extreme scenarios, it raised concerns about the potential effects of concentration of control and decentralization.

The introduction of Revenue Key and adjustments to redemption functionality form part of USUAL’s broader strategy to maintain its position as the leading DeFi protocol. Revenue Key aims to increase the utility of USUAL tokens, stabilize returns for stakers, and provide a transparent mechanism for revenue distribution. USUAL also stated that it plans to improve its model in the coming months by incorporating advanced staking and governance frameworks inspired by the “veModel” used in other DeFi projects.

As USUAL drives these developments, the success of the Revenue Key may serve as a proof of concept of revenue-based tokenomics and potentially influence future applications in the industry. At the same time, the protocol’s response to community concerns will also be closely monitored, as it could impact trust and adoption in the increasingly competitive DeFi ecosystem.