UIP-18 — Launch the Usual Zero Rate (UZR) Market on Fira

Author: Usual Labs (for the Usual ecosystem) Target: Usual DAO Governance Scope: Activate a first fixed-rate lending market on Fira, equivalent to the current USL market on Euler.

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1. Executive summary (what you are being asked to approve)

Usual Labs proposes that the Usual DAO opens a first Fira lending market called Usual Zero Rate (UZR), specialized in fixed-rate borrowing/lending, designed to be functionally equivalent to the current Euler-based USL experience.

If passed, this proposal will:

1. Activate the UZR market on Fira with parameters equivalent to the current Euler market, with a small LTV adjustment to simplify migration:
   • LTV increases from 87.7% to 88% (only on UZR).
   • Borrow interest rate for USD0 is set to 0% (manual / DAO-controlled).
   • A capped 10 bps fee is collected and routed to the Usual DAO.
2. Enable an optional, “no-friction” migration path from Euler → Fira, without forcing anyone to move:
   • Migration is opt-in.
   • Euler stays open (no forced shutdown).
3. Implement a tokenomics alignment item already decided at the DAO level (UIP-11 reference):
   • bUSD0 used as collateral / deposited in USL and UZR becomes a zero-coupon instrument and becomes ineligible for USUAL distribution, completing the planned disinflation shock and supporting the reduction of max supply from 4B → 3B.
4. Strengthen the long-term strategic position of the DAO:
   • Bring TVL back “home” under Fira (better trackability/ownership),
   • Reduce external protocol fee leakage.
   • Bootstrap Usual’s own credit infrastructure (intended as a backbone for the future neobank stack).

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2) Why this matters (DAO-level rationale)

• Own the credit TVL again: activity moves to Usual-owned infrastructure (Fira) → better attribution & strategic control
• Reduce fee leakage to third parties + reduce dependency risk
• Bootstrap the credit backbone intended to support future products (incl. planned neobank stack)

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3. What changes for users (and what does not)

3.1 What does not change

• Users are still borrowing USD0 against bUSD0 collateral.
• The experience is designed to replicate the Euler market mechanics.
• Users are not forced to migrate.
• Euler remains available (positions stay valid there).

3.2 What does change

1. UZR LTV becomes 88% (vs 87.7% on Euler today), to reduce migration friction.
2. Borrow rate becomes 0% on UZR (set manually by the DAO).
3. A capped 10 bps fee annualized is routed to the Usual DAO.
4. bUSD0 in USL & UZR becomes zero-coupon and is not eligible for USUAL distribution (UIP-11 alignment).

4) Market architecture

Current (Euler / USL)

• Collateral: bUSD0 (ex-USD0++)
• Debt: USD0
• Euler vault token: eUSD0

Target (Fira / UZR)

• Collateral: bUSD0
• Debt: USD0
• Fira vault token: U0R

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5) Proposed parameters (risk dials)

• LTV: 0.88
• LLTV: 0.9999
• Borrow rate: 0% (manually set by the Usual DAO; not utilization-based)
• Oracle: fixed bUSD0/USD0 = 1:1
• Caps: none at parameter level
  • Usual Labs can effectively cap growth operationally via controlling U0R mint / migration capacity

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6) Oracle model (explicit trust assumption)

UZR treats bUSD0/USD0 as a fixed 1:1 for borrowing power.

Benefit: better UX + continuity with Euler

Assumption / risk: If bUSD0 trades below 1 on secondary markets, the protocol still values it at 1 for borrow calculations.

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7) Maturity & forced liquidation (closure guarantee)

Fira supports forced liquidation at maturity, triggerable by Usual DAO, even if the position is otherwise healthy. This is intentional for a maturity-based collateral lifecycle.

• Maturity timestamp: 11 Jun 2028, 11:30 UTC
• Unix: 1844335800

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8) Migration plan (optional, designed to be frictionless)

Migration uses a flash-style and atomic operation to replicate the existing Euler position on Fira:

1. DAO enables migration capacity (makes USD0 borrowable against U0R)
2. bUSD0 collateral is withdrawn from Euler
3. bUSD0 is posted as collateral on UZR
4. USD0 is borrowed on UZR at the same effective LTV (88% ceiling)
5. Borrowed USD0 repays the Euler debt
6. Euler loan token is burned as the Euler position closes

User fees: no additional protocol fees (gas still applies)

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9) Fees & value capture

UZR charges a capped 10 bps fee routed to the Usual DAO.

Net effect:

• DAO earns protocol revenue from the credit lane
• DAO reduces fees paid to third-party lending protocols

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10) Security & Audit

Fira lending market and components reviewed by multiple independent parties:

• Cantina Managed review (Nov 2025): 0 Critical / 0 High / 0 Medium
• yAudit (Nov 2025): 0 Critical / 0 High, 1 Medium
  • PermissionedSisuVault share transfers → acknowledged as “won’t fix” operationally
• Sherlock collaborative audit (Nov 2025): 0 High / 0 Medium
  • Several low/info integration findings (some migration tooling/UX edge cases)

Audits reduce risk but do not eliminate:

• (i) new protocol risk
• (ii) governance/role risk
• (iii) oracle model risk (fixed 1:1)
• (iv) operational risk in migration tooling

Audit details: https://docs.fira.money/resources-and-ecosystem/contracts-and-audits

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11) On-chain transparency

All contracts are verified & inspectable (transparent proxy pattern). Key addresses:

• UZR Lending Market: 0xa428723eE8ffD87088C36121d72100B43F11fb6A
• Fixed Rate IRM: 0xe5b2258B4F2d5c96C5F432606110eb31E6B85f54
• USD0/USD0++ Oracle: 0x30Da78355FcEA04D1fa34AF3c318BE203C6F2145
• Permissioned Sisu Vault: 0xFE7C47895eDb12a990b311Df33B90Cfea1D44c24
• Stale Oracle Feed (used): 0xFDF9F131604aaF4832efD6485a321d9165Ff5182
• Permissioned Sisu Vault Factory: 0x0bc5719B062Ce998804741Fb93cF74aC00c5101b
• ChainlinkOracleV2 Factory: 0x25eD27333635F0521ae7Cb1012bFa18A81740025
• USL Migrator: 0x809C212b710f5b8E3F9898213f0D845E2Bc46EC2
• Fixed Rate IRM (10 bps): 0xdfCF197B0B65066183b04B88d50ACDC0C4b01385
• UZR vault oracle adaptor: 0x60f85e06665cecc7782279eee5fc58b3a33910da

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12) Voting guide

- Vote FOR if you accept:

• Moving the credit lane to Usual-owned infrastructure (Fira)
• The fixed 1:1 oracle lane as a deliberate design choice
• Governance-controlled rate (0%) + maturity enforcement
• Optional migration with Euler kept open + DAO fee capture (10 bps)

- Vote AGAINST if you reject

- ABSTAIN if you're neutral

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References

• Cantina, yAudit, Sherlock audit: https://docs.fira.money/resources-and-ecosystem/contracts-and-audits
• UZR note: https://docs.fira.money/resources-and-ecosystem/whitepaper/uzr