Usual Protocol Activates Revenue Switch After USD0++ Depegs

Usual Protocol Activates Revenue Switch After USD0++ Depegs

Usual Protocol, a stablecoin issuer, announced the activation of a “revenue switch” model following USD0++'s depegging on January 9, when it fell as low as $0.89, sparking multimillion-dollar liquidations and widespread backlash from the DeFi community.

The depeg was triggered by a new redemption mechanism that set a floor price of $0.87 for USD0++ redemptions, replacing the previous 1:1 rate with USD0, leading to panic-driven liquidations and liquidity fluctuations on Curve Finance, Pendle, and other decentralized protocols.

The new revenue-sharing model, set to launch January 13, will distribute $5 million in monthly earnings to users, equating to over 50% annualized returns. Additionally, a "1:1 Early Unstaking" feature will allow redemptions at the $1 peg, though with penalties on accrued rewards.

Critics, including Aave’s Stani Kulechov, condemned the lack of a DAO vote on changes that reduced USD0++'s floor price. Curve Finance founder Michael Egorov said the update caught many by surprise, noting the stablecoin's reliance on 4-year Treasury bills.

‍

UK Clarifies Crypto Staking Regulation with Key Exemption

The UK Treasury has amended the Financial Services and Markets Act 2000 to clarify that crypto staking does not fall under the rules governing collective investment schemes (CIS). This change ensures staking activities on proof-of-stake blockchains like Ethereum and Solana can operate without the heavy regulatory burden associated with pooled investment arrangements.

The government stated that the regulations for the establishment, operation, and winding up of collective investment schemes were not designed with cryptoasset staking in mind. Industry participants, including Cordial Systems Co-Founder Sebastian Higgs, praised the move, calling it “significant progress.” The amendment is is set to take effect on Jan. 31, 2025.

‍

Mango Markets to Shut Down After SEC Settlement

Solana decentralized exchange Mango Markets announced it will cease operations, urging users to close positions by Jan. 13. This follows governance votes to end borrowing and lending on the platform, alongside a $700,000 settlement with the SEC over unregistered securities sales.

Mango Markets faced financial and legal turmoil since a 2022 exploit drained over $100 million, leading to civil penalties and MNGO token delisting. The SEC stated, “The label ‘DAO’ does not change the reality of who is behind a project.” Mango’s total value locked plummeted 95% from its $210 million peak in 2021, with legal and operational challenges culminating in its shutdown.

‍

CFTC Subpoenas Coinbase for Polymarket Customer Data

The U.S. Commodity Futures Trading Commission (CFTC) has subpoenaed Coinbase for data on customer interactions with prediction market Polymarket, according to a source familiar with the situation. Coinbase informed affected users about the regulatory request, stating it reviews all government inquiries for legal sufficiency.

The subpoena is part of ongoing CFTC scrutiny of prediction markets, a contentious area in crypto regulation. The CFTC’s leadership transition later this month under President-elect Trump could further influence this case. Neither the CFTC nor Polymarket has commented on the matter.

‍

Data of the Day

Altcoin trading volume dominance on Binance reached 78% in January, reflecting a consistent rise from 50.8% in May 2024. This growth highlights increased trading activity in non-Bitcoin cryptocurrencies over the past several months.

Despite the increase in altcoin trading on Binance, Bitcoin Dominance remains at 57.74%, up 2.41% in 30 days, as per TradingView. CoinMarketCap’s Altcoin Season Index currently scores 45, indicating a stronger leaning toward Bitcoin-driven market dynamics at this time.

‍

More Breaking News

• Sam Altman’s World project surpassed 10 million human verifications and 20 million app downloads, now operating in 160 countries.
• Litecoin’s X account was briefly hacked to promote a fake Solana token, but control was quickly restored by the team.
• New York Attorney General Letitia James seeks to serve a lawsuit in an NFT form to crypto scammers accused of stealing $2.2 million.
• Kenya drafted new cryptocurrency regulations aiming to establish a fair and stable market while addressing risks like money laundering.
• Synthetix shut down perpetual markets on Arbitrum to focus operations exclusively on Coinbase’s Base network for better integrations.
• Data shows 99.6% of Pump.fun traders haven’t realized profits above $10,000, causing debate on how profits are calculated.
• Bybit will restrict services in India from Jan. 12, barring new trades but allowing withdrawals, as it seeks regulatory registration.

For the latest updates on digital asset markets, follow us on X @Datawalletcom.