Is Usual Protocol Safe?
Risk Grade: C- (53/100)
Usual Protocol is rated as elevated risk — multiple novel mechanisms and notable interaction risks.
Moderate risk — already depegged once due to unilateral team action, and the team retains full control over critical parameters
A stablecoin protocol where USD0 is backed by US Treasury bills, and USD0++ is a bond version that locks your stablecoins for extra yield. It manages $400M in deposits. Its C grade reflects the January 2025 crisis when the team unilaterally changed redemption rules, crashing the bond token to $0.89 and triggering mass liquidations.
TVL
$111M
Mechanisms
7
Interactions
5
Value Grade
C+
Key Risks for Usual Protocol Users
The team changed redemption rules without a vote in January 2025, crashing USD0++ to $0.89 -- they can do this again at any time
Despite claiming to be decentralized, a small team controls all critical settings through private wallets with no community oversight
All the Treasury bill collateral is held by one company (Hashnote) -- if that company fails, your stablecoins become worthless with no on-chain backup
Top Risk Factors
- •USD0++ depegged to $0.89 in Jan 2025 after unilateral governance decision changed redemption floor to $0.87, breaking user expectations
- •No functional DAO — protocol team controls multi-sigs and can unilaterally change critical parameters despite decentralisation claims
- •Collateral custodied by Hashnote (off-chain) introduces counterparty risk and opaque real-time collateral verification
How Usual Protocol Compares to Peers
Usual Protocol ranks #25 of 29 Stablecoin protocols (bottom quartile — among the riskiest). At a risk score of 53/100, it's 11 points riskier than the sector average of 42/100.
Adjacent peers: Stables Labs USDX (C, 50/100) is ranked just safer, and World Liberty Financial (C-, 55/100) is ranked just riskier.
See the full Stablecoin sector leaderboard or the Usual Protocol vs World Liberty Financial comparison.
Common Questions about Usual Protocol
Plain-English answers based on Usual Protocol's scores across Hindenrank's 8 risk dimensions. The highest-scoring (riskiest) dimension is Track Record (9/15).
Has Usual Protocol ever been hacked or exploited?
Usual Protocol has had some operational issues or moderate incidents in its history. The track record dimension scored 9/15 — not catastrophic, but enough to flag. Look at the specific events and whether they were addressed by the team before drawing conclusions.
How much money is at stake in Usual Protocol?
Usual Protocol currently holds more than $111M in user deposits. A protocol of this size typically has deeper liquidity, more eyes on the code, and more attention from auditors — but it also means a single failure has a much larger blast radius.
What's the worst-case scenario for Usual Protocol?
Hindenrank has identified specific collapse scenarios for Usual Protocol. The most prominent: "USD0++ Floor Price Cascade Contagion". The trigger condition is Team multi-sig unilaterally changes USD0++ redemption parameters again, or floor price drops below $0.85 while >$100M in USD0++ is locked in Curve and Pendle positions. Reading through the full scenario list on the protocol page is the single best way to understand the actual failure modes — generic "smart contract risk" is rarely the thing that takes a protocol down.
Is Usual Protocol regulated or insured?
Usual Protocol has some regulatory exposure (6/10), typical of mid-sized DeFi protocols. There is no specific enforcement action on record, but the structure includes elements that regulators have flagged in similar protocols. No DeFi protocol carries FDIC-style insurance — even with low regulatory risk, depositors are not protected in the way bank customers are.
What are the biggest red flags for Usual Protocol?
Hindenrank's retail-focused risk audit flagged: The team changed redemption rules without a vote in January 2025, crashing USD0++ to $0.89 -- they can do this again at any time Despite claiming to be decentralized, a small team controls all critical settings through private wallets with no community oversight All the Treasury bill collateral is held by one company (Hashnote) -- if that company fails, your stablecoins become worthless with no on-chain backup On the technical side, 1 critical-severity interaction risk has been identified.
Should beginners deposit into Usual Protocol?
Usual Protocol's C- grade puts it in the elevated-risk band. This is not a beginner-friendly protocol. Anyone depositing here should treat the position as speculative and avoid concentrating significant savings in it.
How does Usual Protocol compare to safer Stablecoin alternatives?
Usual Protocol is one protocol in Hindenrank's Stablecoin coverage. The safest Stablecoin protocols on the leaderboard tend to share three traits: a long incident-free track record, conservative mechanism design, and high-quality public documentation. Compare Usual Protocol against the full Stablecoin ranking before committing capital.
For the full 8-dimension score breakdown, the radar chart, and dependency graph, see the Usual Protocol risk report.
Read the Full Usual Protocol Risk Report
This protocol has 2 collapse scenarios. 1 critical and 3 high-severity interaction risks identified. See the full mechanism classification, interaction matrix, and deep-dive recommendations.
View Full Report →Get risk alerts before it's too late
Weekly grade changes, downgrade alerts, and new protocol risk findings. Free.