Islamic Finance Principles Assessment
Riba — Does Usual USD involve interest?
Yes, Usual USD is built around interest at multiple layers. Its treasury income comes directly from Treasury Bill and repo interest, and its native products (UZR, USL, bUSD0) charge or guarantee fixed interest rates rather than sharing genuine profit-and-loss risk. For Muslim investors, this structural reliance on interest income and interest-bearing lending products makes USD0 and its ecosystem difficult to recommend without substantial modification.
Assessment: Riba Dominant
Score: 28.8/100
Our methodology examines 10 criteria to evaluate how well Usual USD avoids interest-based mechanisms.
USD0's collateral consists entirely of tokenized US Treasury Bills and reverse repurchase agreements — both conventional interest-bearing government debt instruments. The protocol's cited ~$7M annual revenue at current TVL derives directly from this interest income, which is then routed through the "Revenue Switch" to USUAL and USUALx holders. Because the entire yield-generating mechanism of the protocol rests on Treasury/repo interest rather than trade, equity, or asset-backed profit-sharing, this is not incidental exposure but a core, structural riba income stream embedded in how Usual generates and distributes value to its token holders.
Beyond passive treasury income, Usual's own native products explicitly charge interest: UZR allows borrowing USD0 against bUSD0 at a 0.10% APR fee, and USL (Usual Stability Loans) charges a fixed 5% annual interest rate against USD0++ collateral. These are first-party lending products, not third-party integrations. Additionally, bUSD0 promises "guaranteed" 1:1 redemption at maturity plus daily USUAL coupons — a bond-like fixed-return structure — while USD0++'s "Base Interest Guarantee" (forfeited on early exit) mirrors a conventional interest penalty framework rather than a profit-and-loss sharing arrangement.
Gharar — How much uncertainty does Usual USD involve?
Gharar in Usual USD is moderate: transparency around team, funding, and audits reduces uncertainty considerably, but inconsistent disclosure of key mechanics increases it. On balance, the project is far more transparent than typical anonymous ventures, though some terms remain unclear or contradictory across its own documentation.
Assessment: Moderate Gharar (Material Uncertainty)
Score: 57.9/100
Our methodology examines 15 criteria including team transparency, audit quality, and governance.
Usual is led by a named, identifiable team — Pierre Person (CEO, former French National Assembly member involved in the PACTE law), Hugo Sallé de Chou (COO), and Adli Takkal Bataille (DEO, a blockchain veteran since 2014) — founded in France in 2022. The project raised $17M from recognizable institutional backers including Binance Labs, Kraken Ventures, Galaxy Digital, IOSG Ventures, and OKX Ventures. Public documentation and a whitepaper are available, and no fraud, hack, or regulatory action specific to Usual was found in research. This level of named accountability substantially reduces gharar relative to anonymous or undocumented projects.
Usual's contracts have undergone multiple named audits: Halborn (Usual V1), Spearbit Cantina (Pegasus Phase 1), and a public Sherlock audit competition — a meaningfully positive disclosure practice, not an absence of scrutiny. However, exact audit dates are not fully specified in available sources, and key reward parameters are cited inconsistently (staker emission share reported as both ~22% and ~10%; community token allocation cited variously between 64.5% and 90%). Such internal inconsistency across the project's own communications creates residual uncertainty for investors trying to evaluate actual economic terms, even where the underlying code has been reviewed.
Maysir — Does Usual USD involve gambling or speculation?
Usual USD itself, as a dollar-pegged stablecoin, is not designed as a speculative or gambling instrument — its function is price stability rather than price appreciation. Speculative behavior appears mainly in secondary trading of the USUAL governance token and yield-wrapper products, which is typical of listed DeFi tokens generally and does not define USD0's own design.
Assessment: Moderate Maysir (High Risk)
Score: 55.9/100
Our methodology examines 11 criteria to determine whether Usual USD is a gambling instrument or a genuine economic tool.
USD0 serves a genuine real-world function: a permissionless, on-chain-verifiable stablecoin fully collateralized by US Treasury Bills and repurchase agreements sourced from institutional providers. This gives it clear utility as a payment and settlement instrument backed by tangible, auditable assets rather than pure speculation. Because USD0 itself is non-yield-bearing at the base layer, holding it is closer to holding a asset-backed dollar substitute than participating in a wager on price movement, distinguishing it in principle from purely speculative tokens.
Weighed against this utility, Usual's broader ecosystem shows features common to speculative DeFi markets: a Binance Launchpool listing, VC-backed token distribution, and multiple wrapped/staked derivatives (sUSD0, USD0++, bUSD0) that trade actively and carry variable, market-driven pricing. This secondary-market activity reflects general DeFi trading culture rather than a design feature unique to Usual, and third-party speculative trading does not by itself determine the ruling on the underlying stablecoin. Still, prospective users should distinguish between holding USD0 for its stated utility and speculating on USUAL or its yield-bearing derivatives.
The Full 27-Point Screening
1. Legitimacy (4 criteria)
| Criterion | Score | Analysis |
|---|
| Team Transparency | 85/100 | Named, credentialed team (Pierre Person, Hugo Sallé de Chou, Adli Takkal Bataille) with public, traceable professional histories. |
| Fraud & Scam Risk | 65/100 | No fraud, hack, or rug-pull reports tied to Usual itself were found, and multiple audits exist, but absence of negative news alone is not full confirmation of safety. |
| Use Case Legitimacy | 85/100 | The sources describe a clear real-world use case: a Treasury-Bill-backed dollar stablecoin bridging institutional RWAs into on-chain finance. |
| Ethical Practices | 30/100 | The protocol's own design derives value from interest-bearing Treasury Bill/repo collateral and offers fixed-rate lending products, meaning riba exposure is built into its core mechanism rather than arising from third-party misuse. |
Summary: Usual is led by a named, credentialed team with institutional VC backing and no reported fraud or hack incidents in the sources, though independent verification beyond audits remains limited.
2. Project Operations (9 criteria)
| Criterion | Score | Analysis |
|---|
| Core Protocol Business | 40/100 | The core business is stablecoin issuance whose economic engine is explicitly interest income from T-Bills and repo agreements. |
| Transaction Fees | 50/100 | Fees include a partly-redistributed unstaking fee and continuously-accruing APR-based lending fees, which function more like interest than a clean flat fee or burn. |
| Treasury Assets | 10/100 | Treasury/collateral is explicitly composed of US Treasury Bills and reverse repurchase agreements, both interest-bearing instruments. |
| Revenue Model | 15/100 | Protocol revenue is explicitly the interest yield earned on T-Bill and repo collateral, distributed via the Revenue Switch. |
| Transparency | 75/100 | Public whitepaper, technical docs, on-chain verifiable reserves, and audit reports are available. |
| Governance | 55/100 | A DAO and staking-based governance layer exists, but the real balance of power between community, team, and investors is not detailed. |
| Launch Fairness | 55/100 | Sources describe an airdrop-led, community-weighted distribution with capped insider allocation, but cited community/insider percentages vary significantly across sources. |
| Token Distribution | 60/100 | Multiple sources confirm broad community-weighted allocation with team/investor tokens subject to multi-year cliffs and vesting through 2028. |
| Speculation/Utility Ratio | 70/100 | USD0 itself functions as a utility-oriented, pegged payment/collateral stablecoin rather than a speculative meme asset, though wrapped yield tokens add speculative layers. |
Summary: The protocol issues a documented, RWA-backed stablecoin with DAO governance, but its treasury and fee mechanics are built around interest-bearing Treasury and repo instruments.
3. Financial Health (4 criteria)
| Criterion | Score | Analysis |
|---|
| Protocol Revenue | 15/100 | Core protocol revenue is explicitly interest earned on Treasury Bill and repo collateral. |
| Financial Status | 55/100 | Funding and VC backing plus a cited TVL-linked revenue figure are given, but no independent audited financial statements or stability metrics appear in the sources. |
| Interest Assessment | 15/100 | The base protocol runs native interest-based lending markets (UZR, USL) and derives its main revenue from Treasury Bill interest. |
| Audit Quality | 70/100 | Named audits exist (Halborn on Usual V1, Spearbit Cantina on Pegasus Phase 1, Sherlock audit competition), though consolidated findings/dates are only partially detailed. |
Summary: Protocol revenue is explicitly sourced from Treasury Bill/repo interest and native fixed-rate lending products, and while several named audit firms have reviewed the contracts, broader financial disclosures are limited in the sources.
4. Token Economics (5 criteria)
| Criterion | Score | Analysis |
|---|
| Token Purpose | 70/100 | USD0 is designed as an RWA-backed utility/payment stablecoin, not a meme token, per the whitepaper. |
| Governance Rights | 55/100 | Governance rights exist but attach to the USUAL/USUALx token rather than USD0 itself, requiring staking to activate. |
| Rewards Distribution | 40/100 | Rewards mix variable revenue-share payouts with fixed-percentage emissions and, for bUSD0, fixed daily "coupons" plus guaranteed maturity redemption, which leans interest-like. |
| Speculation Controls | 55/100 | Vesting cliffs, linear unlocks, and a disinflationary TVL-linked emission model are documented anti-speculation measures for USUAL. |
| Asset Backing | 45/100 | USD0 is backed by real assets (US Treasury Bills, repos), but these are interest-bearing rather than halal trade/equity-based instruments. |
Summary: USD0 serves a genuine payment/collateral utility purpose, but associated reward products mix variable revenue-sharing with fixed, guaranteed-return features that raise riba-related questions.
5. Staking Mechanism
Usual USD has no native staking mechanism, so these five criteria are not applicable and are excluded from the score entirely rather than counted as zeros.
Overall Assessment: Usual/USD0 appears to be a legitimate, transparent, non-meme RWA stablecoin project, but its reliance on interest-bearing collateral and native interest-based lending products leaves significant unresolved Shariah concerns around riba.
Written by ThanvirFounder, Ex Director S&P Global Energy
Reviewed by Imam Omar SiddiqiShariah Scholar