Collateral Damage: USD0++ Depeg Leaves Farmers in the Red - Leviathan News with a Monday livestream to start the week with

Leviathan News’ piece and accompanying livestream cover the sudden depeg of USD0++, a yield‑bearing “staked” version of the USD0 stablecoin issued by Usual Money, and the resulting losses for leveraged DeFi farmers across several protocols. On 9 January, Usual Money unilaterally changed the core redemption mechanics of USD0++, redefining it from a stablecoin‑like, yield‑bearing token into a four‑year zero‑coupon bond with a new immediate redemption floor of $0.87, set to linearly increase back to $1 over four years. This broke the prior assumption that USD0++ could effectively be redeemed at or near $1 via USD0, triggering heavy selling, a rapid depeg as low as about $0.89 before stabilizing around $0.92, and severe imbalance in its main Curve pool (around 8/92%), leaving many farmers who had used USD0++ as collateral or in yield strategies suddenly in the red. The coverage explains that USD0++ was marketed as a yield‑bearing extension of USD0 (itself backed by USDC), where users staked USD0 to receive USD0++ and earned additional rewards in the USUAL governance token, subject to a four‑year lockup. The January update introduced two new exit paths: a “conditional exit” at 1:1 with forfeiture of part of accrued rewards, and an “unconditional exit” at the discounted floor price, effectively crystallizing losses for anyone needing immediate liquidity. Because hundreds of millions of dollars in USD0++ sat across DeFi protocols such as Curve, Morpho, and Pendle, the repricing sparked liquidations, trapped capital in positions still valuing USD0++ at $1, and raised concerns about governance, disclosure, and potential conflicts of interest, including scrutiny of MEV Capital’s role and profits around the event. Leviathan News positions the incident as a case study in stablecoin‑like product risk, showing how abrupt parameter changes by issuers can cascade through interconnected DeFi systems, damaging trust in yield‑bearing “stable” instruments and highlighting the need for clearer risk communication and more robust protocol‑level safeguards.

✨ AI-generated background, compiled from web sources — not editorial content.

More coverage

• Collateral Damage: USD0++ Depeg Leaves Farmers in the Red (leviathannews.substack.com)
• Farmers Are Collateral Damage in Trump's Iran War - Mother Jones (motherjones.com)
• What Is a Stablecoin Depeg? Causes and Impact - Chainlink (chain.link)
• Unusual Money - Rekt News (rekt.news)
• Stablecoin Depeg: What Causes It and How to Spot Risk | Support (eco.com)

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