Every balance on Usual is backed 1-to-1 by real assets. Not by a bank deposit, not by an IOU, not by a corporate balance sheet. As a DeFi bank, Usual makes the backing visible on-chain so you can verify it yourself. This article explains what that means and how it works.
The general rule
For every unit of USD0, EUR0, ETH0, or bUSD0 you hold, there is an equivalent amount of real-world collateral held by an institutional provider. The collateral type depends on the product:
Your balance | Backed by |
USD0 | US Treasury Bills (via USYC, USTBL, UsualM) |
EUR0 | Eurozone Treasury Bills (via EUTBL) |
ETH0 | Staked ETH (via wstETH from Lido) |
bUSD0 | USD0 (which is itself backed by US Treasury Bills) |
There are no fractional reserves, no hidden loans, and no commercial bank deposits as backing.
Why real assets, not bank balances
Most USD stablecoins store their reserves as a mix of Treasury Bills and commercial bank deposits. That mix is what caused USDC to lose its peg briefly during the Silicon Valley Bank collapse in March 2023 — part of USDC's reserves sat in the failed bank.
Usual is different: the reserves are held as tokenized Treasury Bills on-chain, not as cash in a bank. The tokenization layer is provided by regulated institutions (Hashnote, Spiko, M0 Foundation, Lido), and the balances are visible on-chain in real time.
The practical consequence: a commercial bank failure does not affect your Usual balance.
Full transparency
Each collateral type is represented by a token that can be inspected on-chain:
USYC (Hashnote) — short-term US Treasury Bills and repo
USTBL (Spiko) — short-term US Treasury Bills
EUTBL (Spiko) — Eurozone Treasury Bills
UsualM (M0 Foundation) — tokenized cash equivalents
wstETH (Lido) — staked ETH
You can verify at any time that the reserves held in Usual's contracts match the circulating supply of each product.
The transparency chain, step by step
You deposit dollars into USD0
Usual (or a Collateral Provider) converts your dollars into tokenized Treasury Bills
The tokenized Treasury Bills are held in the DaoCollateral contract, visible on-chain
The underlying Treasury Bills are held by the institutional provider in segregated, ring-fenced accounts
The provider publishes the NAV daily on-chain (via Chainlink oracles for EUR0)
Third-party auditors (PwC, Trail of Bits, and others) verify the provider's accounting and smart contracts
Three layers of verification: on-chain data, on-chain oracles, and off-chain audits.
What about DAO treasury revenue?
Separately from the product backing, Usual's DAO treasury holds accumulated protocol revenue (70% of all revenue flows there). This treasury is diversified across stables, ETH, USUAL, and yield strategies. It is not used to back USD0, EUR0, ETH0, or bUSD0 — the product backing is separate from treasury holdings by design.
How to verify yourself
Three ways:
Open the USD0 or EUR0 page in the app — it shows the live composition of the reserves
Check the DaoCollateral contract on-chain — the balance of each collateral token is public
Read the audit reports — available on docs.usual.money
Note: "Backed by real assets" is a common claim in stablecoin marketing. At Usual, it is enforced and verifiable at every step. If you are uncertain about a specific product, read its dedicated article.
Technical note (for DeFi users): The DaoCollateral contract is the central collateral holding contract for USD0. Each collateral token has a weighted allocation managed by the Multi Collateral Controller, which adjusts collateral provision rewards to maintain the target portfolio composition. On-chain NAV feeds for Spiko tokens are published via Chainlink. Ring-fencing of off-chain assets is enforced by the provider's legal structure. See the docs for the full collateral specification.
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