UIP-3: Staking Usual DAO Treasury Assets into USUALx

UIP-3: Staking Usual DAO Treasury Assets into USUALx

Category: Protocol Treasury Management

Authors: Usual Labs Core Contributors

Date: 2025-03-07

Status: Proposed

1. Summary

The Usual DAO treasury currently holds USUAL tokens that are not generating yield. In the Usual Protocol, staking USUAL into USUALx unlocks significant benefits: stakers receive a share of protocol emissions, fees, and revenue. By leaving the treasury’s USUAL idle, the DAO forgoes these rewards and also risks dilution of its stake in the ecosystem (as new USUAL emissions go only to those who stake).

Aligning with Usual’s mission to return value to token holders, this proposal seeks to maximize the utility of treasury assets. Many community members are already staking their USUAL for auto-compounding returns, and it’s prudent for the DAO itself to do the same. Staking the treasury’s USUAL will increase the DAO’s holdings over time and demonstrate confidence in the protocol’s long-term vision. Ultimately, this move strengthens the treasury and, by extension, benefits all USUAL holders through a more robust, value-growing DAO.

Additionally, per the Usual whitepaper, the proceeds generated from staking will also contribute to future distributions to USUALx and USUAL* holders, ensuring that the benefits extend beyond the treasury itself and are shared across the ecosystem.

2. Concerned Contracts

• DAO treasury : The treasury already accrued USUAL from the USD0++ early unstaking. The address is 0x81ad394C0Fa87e99Ca46E1aca093BEe020f203f4
• USUALx (staking contract) : The address is 0x06B964d96f5dCF7Eae9d7C559B09EDCe244d4B8E
• Checking accrued USUAL: Usual tokens accumulated through the USUALx unstaking function. The amount could be checked here at this contract address, looking at the getAccumulatedFees method in “read as a proxy” : 0x06B964d96f5dCF7Eae9d7C559B09EDCe244d4B8E

3. Proposed Specifications

1. Stake Current USUAL Holdings: Upon approval, the DAO’s entire current USUAL balance (held in the treasury wallet) will be staked through the official staking contract to mint USUALx. This conversion is effectively 1:1 in terms of share — the treasury will receive USUALx tokens representing its portion of the global staking pool. These USUALx will be held in the DAO treasury’s wallet.

2. Automatic Staking of Future USUAL: The DAO is granted a standing authorization to stake any future USUAL tokens that the treasury acquires. This includes USUAL obtained from protocol operations (e.g. portions of fees or other distributions that the treasury might receive) or any other sources. Instead of requiring a new governance vote each time the treasury gets additional USUAL, the treasury managers (multisig holders) are empowered to periodically stake those new tokens into USUALx under this blanket approval.

3. No Unstaking Planned: The intent is to stake for the long term; there is no plan to unstake any treasury USUAL in the foreseeable future. (Unstaking USUALx back to USUAL incurs a 10% fee, so the DAO will avoid this unless absolutely necessary and approved by a future governance vote.) The staked position will remain liquid via USUALx, meaning the treasury could swap USUALx back to USUAL on the open market if an urgent need arises. However, the core strategy is to hold and grow the staked position, not to trade or withdraw it.

By approving this proposal, the community authorizes the DAO to immediately put its idle USUAL assets to work and to continue doing so going forward, without requiring repetitive proposals for each new batch of tokens. All staked USUAL (present and future) will be transparently accounted for as USUALx held by the treasury.

4. Redistribution details

This proposal focuses solely on staking and accumulating rewards, not on spending or distributing them. All USUAL and USD0 earned from staking will accrue to the DAO’s treasury and remain under the DAO’s control. Future redistribution of these rewards will not occur without a new governance proposal and should initially follow the whitepaper.

5. Voting Procedure

• Voting Period: 3 days
• Passing Criteria: A minimum of 51% (simple majority) across all votes is required to veto this proposal. If veto fails (i.e., less than 51% vote “No”), the proposal passes automatically.
• Voting Power Distribution:
  • USUALx: 40% of total voting power
  • USUAL * : 40% of total voting power
  • USD0++: 20% of total voting power

Vote Options

1. Yes – Approve the DAO staking right on detained USUAL and signal interest in both this proposal and participation in Usual governance.
2. No – Oppose this proposal in its current form. A majority of 51% “No” votes results in a veto.
3. Abstain – You wish to signal neither support nor opposition but support governance participation.

6. Conclusion

Empowering the treasury to grow alongside its community – this is the core of what we aim to achieve. Staking the DAO’s USUAL into USUALx is a straightforward, low-risk action that unlocks substantial upside for the protocol and its stakeholders. It allows the DAO to capture the value that the Usual ecosystem generates, rather than leaving that value on the table. This proposal strengthens the alignment between the DAO and USUAL holders, as both benefit from the same mechanism of staking and long-term commitment.

Thank you for your participation in shaping the future of Usual Protocol!

Disclaimer: Final parameters and details may be amended based on community feedback and subsequent risk assessments. All aspects of this proposal are subject to veto or revision.

Proposed by:

Usual Labs Core Contributors

2025-03-07