This is a proposal to whitelist the Usual Boosted USDC Vault on MetaMorpho. The Usual Boosted USDC Vault will seek to whitelist Usual protocol collateral assets markets and continuously optimize risk-adjusted yield across these Morpho Blue Usual protocol collateral assets. The vault and the markets will be incentivized by the Usual DAO in alignment with the pills campaign. (See rules) You can see your pills at any time in the Usual Drugstore.
For the initialization of this Vault, we have whitelisted the USD0++/USDC and Curve LP (USD0++/USD0)/USDC markets.
About MEV
MEV Capital is a DeFi assets manager firm that already has more than $300M in assets under management and that is already curator on Symbiotic and Mellow. Its knowledge in DeFi is now clearly established and it will act as the first curator of Usual Morpho vaults and markets.
About Usual
USUAL rebuilds Tether on-chain, redistributing generated value to the user. As a decentralized protocol, it aggregates and unifies RWA TBill liquidity into a permissionless and composable stablecoin (USD0). The structure redistributes power and ownership to users and third parties, mirroring a scenario where TVL providers own the protocol and its revenues. This innovative approach transforms how value and governance are managed in the digital finance landscape.
Market Specifications
The Usual Boosted USDC Vault has whitelisted these markets for supply:
Objective: The Usual Boosted USDC Vault has the objective to provide external USDC liquidity to Usual assets users. It will allow them to get a better capital efficiency and to make leverage loops.
Incentives: Earn 1 Pill per day + Bonus Pills for every new USD0++ minted
Vault Fee
The vault have a 8% fee at the moment.
Whitelisting Vault Contracts
We ask Morpho DAO to whitelist this vault to be displayed in the UI.
MetaMorpho vaults may receive $MORPHO rewards from supplying to incentivized markets on Morpho Blue. To allow the vaults to transfer these potential $MORPHO rewards to suppliers, we propose whitelisting our vault addresses. The vaults have already reached the $2M threshold.
MEV Capital will make raises of the supply caps of the Morpho Usual Boosted USDC market.
Motivation
The Usual Boosted USDC market has been at its cap for an extended period of time, indicating there being more demand. This cap was placed for economic reasons surrounding available onchain liquidity for USD0++ at earlier stages of the Usual protocol. With Usual continuously maturing we want to double down on Morpho and further grow our vaults.
The DAO want to go one step further and offer lowest risk for all stakeholder holders involved by guaranteeing redemption for the entire supply of USD0++ in case of extensive liquidation without secondary market liquidity. This also includes collateralized USD0++ in Morpho, where the Usual DAO can redeem any USD0++ 1:1 in case of a liquidity crunch or other reasons. (DAO Unlock capability proof)
This is also possible thanks to the DAO partner and current only source of backing, Hashnote and their USYC product.
What is USYC?
USYC is the on-chain representation of the Hashnote International Short Duration Yield Fund Ltd. (“SDYF”). SDYF invests primarily in reverse repo and U.S. Government backed securities.
Why USYC
Being invested in overnight repo means minimized market risk, duration risk, and credit risk – as good as being in a U.S. Treasury Money Market fund, but with the transaction speed, transparency, and composability of being an ERC-20.
USYC lets you earn short-term risk free returns. Assets are deployed in reverse repo, with some allocated to T-Bills, to ensure maximum liquidity and minimum duration risk.
Liquidity for USYC
Mint / redeem time T+0 to T+1 into USDC or PYUSD.
Instant on-chain liquidity buffer of ~5% of entire USYC supply (can be check by anybody at anytime here : https://usyc.hashnote.com/)
Remaining at T+0 , T+1
Atomic on-chain instant mint / redeem available.
On-chain mint available only during “market hours”.
On-chain redemption available at any time but for limited size.
We recently added a new PT market to our Usual Boosted USDC vault. This addition aligns us with borrowers seeking to profit from the full range of Usual products.
There is also a PT-USD0++ market on the Usual Boosted USDC vault. Once this market reaches maturity, users will be able to zap their PT position to the new market directly from Pendle.
The first PT USD0++ of Usual matured on October 31, creating significant selling pressure on the USD0++/USD0 secondary curve market.
Considering the large amount of selling pressure and volume, it has been a very positive stress test for Usual, which utilized the PAR (Parity Arbitrage Right - Parity Arbitrage Right (PAR) | Usual Docs) to defend the USD0++ peg. The USD0 peg was also defended by various arbitrageurs. This demonstrated that the Usual peg remained solid and that the PAR functioned as expected.
We recently added a new PT market to our Usual Boosted USDC vault. This addition aligns us with borrowers seeking to profit from the full range of Usual products.
There is also a PT-USD0++ market on the Usual Boosted USDC vault. Once this market reaches maturity, users will be able to zap their PT position to the new market directly from Pendle.
We recently added a new market to our USUAL USDC Boosted vault. This addition aligns us with borrowers seeking to profit from the full range of Usual products.
Unlike the existing USD0++/USDC market, which relies on a hardcoded price source (1 USD0++ = 1 USDC), this new market uses a Chainlink oracle based on the secondary liquidity of USD0++.
This type of setup is inherently more robust in the long term and offers greater protection for the vault’s suppliers while keeping borrowers in optimal conditions, as liquidity is now significantly more developed.
USD0++ currently has a mechanism to maintain its peg:
If there is a price imbalance, the Usual protocol features an arbitrage mechanism (PAR), allowing the DAO to unlock USD0 and buy back USD0++ at its fair value.
This mechanism ensures the peg is effectively maintained, even under significant selling pressure.
USD0++ has a floor price (greater than $0.86) that increases linearly until the maturity of its underlying asset (4 years). Integrations to reflect this floor price on-chain will be implemented soon.
The PAR redemption 1:1 for USD0+:USD0 is also available to anyone on the Usual protocol.
Therefore, we encourage borrowers from the previous USD0++/USDC market to migrate their positions to the new market. This can be done manually or in a single transaction using Morpho’s “Zap Position” function.
