Usual’s Revenue Switch: A New Era in DeFi?

Usual, a significant player in the decentralized finance ecosystem, has taken a bold step with the launch of its Revenue Switch. This mechanism promises to distribute all of Usual’s protocol revenue directly to USUALx stakers, essentially linking token value to tangible earnings. Despite the optimism surrounding this innovation, the initiative is shadowed by concerns over recent modifications to the protocol’s redeem function.

The Revenue Switch: Driving Long-Term Growth

Activated on January 13, 2025, the Revenue Switch proposes to generate approximately $5 million monthly in revenue for USUALx stakers, payable in USD0 stablecoins. This initiative aims to promote long-term staking by offering substantial rewards—275% annual yield, split into 42% USD0 and 233% USUAL tokens. By tying token value directly to earnings, Usual seeks to foster a sustainable growth trajectory.

Community Concerns: Redeem Function Changes

While the Revenue Switch represents an advancement for Usual, the community’s reception has been mixed due to changes in the USD0 stablecoin redeem function. The revisions allow temporary suspension of redemptions during volatile market conditions. Although designed to ensure stability, these changes have raised alarms about centralization and control, potentially undermining the protocol’s decentralization ethos.

Implications for DeFi and Usual’s Position

These updates form part of Usual’s larger strategy to remain competitive within the DeFi space. By enhancing token utility and stabilizing returns, Usual aspires to lead in a rapidly evolving market. The introduction of advanced staking and governance frameworks, similar to the “veModel” used by other successful DeFi projects, is on the horizon as well.

Looking Forward: Usual’s Balancing Act

For Usual, the success of the Revenue Switch could set a precedent for revenue-driven tokenomics in DeFi. As the protocol adapts its strategies, the community’s response will play a crucial role in shaping trust and future adoption. In a realm where innovation is key, USUAL’s approach could herald new practices if they effectively address stakeholder concerns.