RWA-based DeFi protocols are gaining attention again, and one of the most interesting cases is Usual Finance.

It once scaled beyond $1B in TVL, but after a major contraction, it now operates at a much smaller scale while still generating real revenue.

The key question is not whether Usual is “dead or alive” — but whether it can recover its growth engine.

Usual is a stablecoin protocol built around real-world assets (RWAs), primarily tokenized U.S. Treasuries.

Unlike traditional stablecoins such as USDT or USDC, where most yield accrues to the issuer, Usual aims to distribute part of that yield back to users and token holders.

Its core asset is USD0, a stablecoin fully backed by tokenized real-world assets, including:

• Hashnote USYC

• M0 ($M)

• Spiko USTBL

This makes M0 part of Usual’s underlying infrastructure.

To understand Usual, it’s important to separate the two layers:

USD0 is a stablecoin backed by yield-bearing real-world assets. Users can also access yield via related products like sUSD0.

Staking USUAL converts it into USUALx, which earns:

• Daily token emissions

• Revenue Switch distributions from protocol income

Currently, ~30% of protocol revenue is distributed to USUALx holders, while the remaining 70% goes to the DAO treasury.

In 2025, Usual lost market trust after changes to the redemption mechanism of USD0++ (now bUSD0).

This triggered:

• A sharp TVL decline (from over $1B)

• A contraction in USD0 supply

• A significant price drawdown of USUAL

This event still heavily influences market perception today.

Despite the collapse in scale, Usual is still generating meaningful activity:

• USD0 supply: ~$560M

• Annual revenue: ~$5.5–6M

• Treasury: ~$30M+

• USUAL market cap: ~$25M

• FDV: ~$43M

Interestingly, the treasury is larger than the current market cap.

From a traditional equity perspective, this is already unusual.

Most investors focus on:

• Token price

• Market cap

• TVL

But for Usual, the most important metric is:

The entire system works like this:

USD0 supply
→ underlying real-world assets
→ protocol revenue
→ Revenue Switch
→ USUALx distributions
→ USUAL value

If USD0 supply does not grow, revenue cannot grow. And if revenue does not grow, token value has no fundamental driver.

USD0 supply is currently around $560M, roughly flat after peaking above $1B.

This means:

• The protocol is not collapsing

• But it is also not yet in a recovery growth phase

Whether Usual is undervalued or correctly priced depends entirely on one thing:

Does USD0 supply start growing again?

Usual is no longer a high-growth DeFi story.

It is better understood as a recovery-stage protocol trying to rebuild its core demand.

For now, I will be watching one metric closely:

USD0 circulating supply growth.

Because in Usual’s case, everything ultimately flows from that.