Usual’s Revenue Switch: Analyzing Its Impact on Crypto Exchange Platforms

What is Usual’s Revenue Switch?

The Usual Protocol has rolled out this new thing called the Revenue Switch. What does it do? Well, it aims to funnel 100% of the protocol’s revenue to USUALx stakers. This could potentially boost the token’s utility while also supporting sustainable growth within the ecosystem. The Revenue Switch will be put to work on January 13, 2025, and it’s estimated to shell out around $5 million monthly, directly to stakers in USD0 stablecoin.

This mechanism is designed to incentivize long-term staking, something we all know is good for a project. It ties token value to the actual earnings the protocol generates, which is definitely a cool concept. And it’s also a governance tool that’s decentralized—though that’s up for debate now.

The Good and Bad of Decentralization

Now let’s talk about this from a decentralization angle. The Revenue Switch doesn’t, in itself, compromise the decentralization of the platform, but it is a governance tool that aligns the interests of stakers. That’s something, right? However, the changes made to the redeem function of USD0 stablecoins have caused a bit of an uproar.

The redeem function can now be temporarily shut down under certain conditions, like extreme market volatility or liquidity crunches. Sounds reasonable, but it does introduce some centralized control to an otherwise decentralized platform—at least, that’s the concern.

Some community members think that this could be a slippery slope, and it feels a bit contradictory to the stated goals of decentralization. The Usual team has stated that the changes are there to protect the ecosystem during wild fluctuations, but, again, it’s raising eyebrows.

The Future of Usual’s Revenue Model

Then there’s the advanced staking and governance models that Usual is rolling out. They’re inspired by the “veModel” from other DeFi projects. They want to give stakers more control in governing the protocol and making decisions, which is an interesting move.

The models advocate for sustainable incentives for staking, which is great on paper. Usual’s hoping this will create a more decentralized and robust ecosystem, aligned with transparency and fairness—two qualities we all like to see in crypto.

Summary: Usual’s Model for the Crypto Exchange Space

All in all, the Revenue Switch and the changes made to the redeem function are big moves for Usual and the crypto exchange platform space. While the switch doesn’t directly impact decentralization, the changes to the redeem function have stirred up worries about centralized control.

The community’s response has been split. The Revenue Switch seems to be a positive change, but the redeem function changes are making some nervous. With the implementation of advanced staking models too, Usual is trying to create something that feels fair and solid.

If this all works out, it could set a new standard for revenue-based tokenomics. But whether or not it can gain community trust remains to be seen.