Islamic Finance Principles Assessment
Riba — Does USUALx involve interest?
Yes, USUALx involves interest at its foundation: the protocol's collateral base is short-term U.S. Treasury Bills and interest-bearing instruments like USYC, and its "Revenue Switch" distributes that interest income directly to stakers. This is not a case of an incidental exposure but a designed revenue pipeline built on riba. For Muslim investors, this is a significant structural concern that outweighs the project's otherwise legitimate team and audits.
Assessment: Riba Dominant
Score: 25.5/100
Our methodology examines 10 criteria to evaluate how well USUALx avoids interest-based mechanisms.
Usual's treasury composition is explicit: USD0 is backed by USDC and RWA/T-Bill instruments such as Hashnote's USYC, and the protocol's documented revenue is interest income earned on this collateral. Reported figures include TVL between $635M-$1.8B and annual revenue near $27M, with cumulative distributions to users cited at $259M. This is a conventional fixed-income-style revenue model, indistinguishable in substance from interest earned by a bank on government bonds. The presence of a "Syrup Vault" linking USD0++ to Maple Finance's lending market compounds this, layering additional interest-bearing exposure atop the base T-Bill yield.
USUALx rewards are dual-sourced: a formulaic share of daily USUAL emissions (an "anti-dilution" mechanic, roughly 10-22% depending on period) plus a variable, revenue-linked USD0 payment from the Revenue Switch, weighted up to 8x for longer locks. While the emissions component is more akin to token distribution than fixed interest, the Revenue Switch payment is explicitly interest income passed through from T-Bill and RWA collateral. Even though the payout amount varies with realized revenue rather than being contractually fixed, the underlying source remains interest, which is the more decisive factor for Shariah purposes than payout variability alone.
Gharar — How much uncertainty does USUALx involve?
Uncertainty around USUALx is moderate: the team, funding, and mechanics are unusually well-documented for a DeFi project, but reward-source complexity and mixed tokenomics disclosures introduce some residual ambiguity. Overall transparency reduces gharar meaningfully relative to anonymous or undocumented projects.
Assessment: Moderate Gharar (Material Uncertainty)
Score: 54/100
Our methodology examines 15 criteria including team transparency, audit quality, and governance.
Usual's team is fully named and credentialed: CEO Pierre Person (former French National Assembly member), CTO Manfred Tourron (ex-Tendermint/Gnoland), CFO Pete (ex-BNP Paribas quant finance), among others, alongside disclosed venture backers including Hypersphere, GSR, StarkWare, and IOSG. Founded in 2022 in Paris, the project has a public track record with no documented hacks, rug-pulls, or regulatory action found against Usual or USUALx specifically in the sources reviewed. This level of named accountability and institutional backing substantially reduces the identity- and disclosure-related uncertainty that typically plagues newer DeFi tokens.
The protocol's smart contracts have been audited by Halborn, subjected to a public Sherlock audit competition, and reviewed by Spearbit Cantina under a report titled "Pegasus Phase 1" covering the USD0/USUALx contracts. This is a credible, multi-firm audit trail, though exact audit dates and detailed findings summaries were not available in the sources reviewed, leaving some gap in verification depth. Documentation on staking mechanics, lock terms, and fee splits is fairly extensive via official docs and governance posts (UIP-9), though tokenomics figures vary across sources (e.g., 90/10 split versus a more granular 64.5% community/8.5% airdrop breakdown), introducing minor reconciliation uncertainty.
Maysir — Does USUALx involve gambling or speculation?
USUALx itself is not structured as a gambling instrument: its rewards derive from disclosed protocol revenue and emissions schedules rather than chance-based payouts. Speculative trading of the token in secondary markets is a separate behavioral risk that applies to nearly any liquid crypto asset and does not stem from USUALx's own design.
Assessment: Moderate Maysir (High Risk)
Score: 50.5/100
Our methodology examines 11 criteria to determine whether USUALx is a gambling instrument or a genuine economic tool.
USUALx serves a genuine functional role within the Usual protocol: it represents locked governance and revenue-sharing rights tied to a real RWA-backed stablecoin system with T-Bill collateral, disclosed treasury mechanics, and a working buyback/anti-dilution framework. Lock periods (1 to 12 months) and boosted reward weighting incentivize long-term participation over short-term flipping, aligning the token's design with productive protocol governance rather than pure price wagering. This utility-driven structure is a meaningful distinguishing factor from tokens whose only function is speculative trading.
Against this genuine utility must be weighed the reality that USUALx, like most liquid governance/staking tokens, trades actively on secondary markets where price speculation can dominate short-term behavior, and the 10% unstaking fee (split among stakers, insiders, and treasury) functions as a penalty that may itself invite speculative timing games. However, this secondary-market speculation reflects third-party trading behavior rather than a feature designed into USUALx itself, and per the framework applied here, such misuse does not govern the token's own classification. The more consequential factor for this asset remains its interest-based revenue design rather than gambling-like characteristics.
The Full 27-Point Screening
1. Legitimacy (4 criteria)
| Criterion | Score | Analysis |
|---|
| Team Transparency | 80/100 | Team members are named with verifiable backgrounds (ex-French MP CEO, ex-BNP Paribas CFO, named CTO/COO/VP Product) across multiple independent listings. |
| Fraud & Scam Risk | 65/100 | No hack, rug-pull, or enforcement action naming Usual/USUALx was found in these sources, but the absence of adverse reports is not the same as a confirmed clean track record. |
| Use Case Legitimacy | 75/100 | The protocol has a clearly documented real use case (RWA-backed stablecoin issuance with revenue-sharing), not merely speculative branding. |
| Ethical Practices | 25/100 | The protocol's own design generates its core revenue from interest earned on U.S. Treasury Bill and interest-bearing collateral, which is a riba-based mechanism built into the coin's own architecture, not third-party misuse. |
Summary: Usual has a named, credentialed founding team and multiple named institutional backers, with no fraud or regulatory action found against it in these sources.
2. Project Operations (9 criteria)
| Criterion | Score | Analysis |
|---|
| Core Protocol Business | 25/100 | The base protocol's core business model is issuing a stablecoin whose value proposition and cash flows are explicitly interest income on Treasury collateral. |
| Transaction Fees | 55/100 | Unstaking fees and system fees are split among stakers, insiders and the treasury rather than simply burned, and the sources give only partial detail on standard transaction fee handling. |
| Treasury Assets | 20/100 | Treasury and collateral holdings are explicitly composed of interest-bearing instruments (T-Bills, USYC) and the DAO treasury itself accrues interest. |
| Revenue Model | 20/100 | The stated protocol revenue model is interest income earned on collateral, a riba-based revenue source by design. |
| Transparency | 65/100 | Extensive public documentation, audits and blog disclosures exist, but the sources do not explicitly confirm full open-source contract availability. |
| Governance | 60/100 | A DAO/UIP governance process is described (e.g., UIP-9), but the degree of real decentralisation versus core-team influence is not detailed. |
| Launch Fairness | 60/100 | Vesting schedules with cliffs and multi-year linear release for team/investors are documented, though allocation percentages differ across sources, suggesting some inconsistency in reporting fairness claims. |
| Token Distribution | 55/100 | Distribution data show a community-weighted allocation, but investor/team/VC allocations are still meaningful and vary depending on the source consulted. |
| Speculation/Utility Ratio | 50/100 | The protocol has genuine utility but sources also describe a speculative "Alpha Yield" component and note the token's price disconnect from fundamentals, indicating a mixed utility/speculation profile. |
Summary: The protocol issues an RWA-collateralized stablecoin (USD0/USD0++) and a governance/revenue-sharing token (USUAL/USUALx), with fairly documented but source-inconsistent vesting and distribution schedules.
3. Financial Health (4 criteria)
| Criterion | Score | Analysis |
|---|
| Protocol Revenue | 20/100 | Protocol revenue is explicitly sourced from interest on Treasury-bill collateral, a riba-based income stream. |
| Financial Status | 55/100 | TVL and revenue figures are disclosed and substantial, but the protocol underwent a disclosed "realignment" after tokenomics issues, indicating some historical instability. |
| Interest Assessment | 10/100 | The protocol explicitly invests collateral into interest-bearing instruments and earns interest as its core revenue mechanism. |
| Audit Quality | 70/100 | Named audit firms (Halborn, Sherlock competition, Spearbit Cantina) with defined scope are documented, though specific dates and full findings are not detailed in these sources. |
Summary: Protocol revenue and native staking yield are explicitly generated from interest earned on Treasury-bill and interest-bearing collateral, and while named security auditors were engaged, detailed audit dates and findings were not fully available in these sources.
4. Token Economics (5 criteria)
| Criterion | Score | Analysis |
|---|
| Token Purpose | 70/100 | USUAL is explicitly designed as a governance and revenue-sharing utility token, not a meme token. |
| Governance Rights | 75/100 | Holders are documented to have governance rights via USUAL/USUALx and DAO proposals. |
| Rewards Distribution | 35/100 | Rewards combine a fixed formulaic emission share with a revenue-linked distribution, but the revenue itself derives from interest income, undermining a clean variable/performance-based classification. |
| Speculation Controls | 55/100 | Buyback schemes, lock-based boosts and disinflationary emissions show some anti-speculation design intent, though their practical effectiveness is not verifiable from these sources. |
| Asset Backing | 25/100 | The token/protocol is explicitly backed by real-world assets that are themselves interest-bearing instruments (T-Bills, USYC), rather than halal-compliant backing. |
Summary: USUAL is a genuine utility/governance token with mixed fixed-emission and revenue-linked reward mechanics, but its value and rewards are ultimately backed by interest-bearing real-world assets.
5. Staking Mechanism (5 criteria)
| Criterion | Score | Analysis |
|---|
| Mechanism Type | 65/100 | USUALx is a liquid, auto-compounding, transferable staking derivative with documented lock-period options and terms. |
| Islamic Contract Classification | 20/100 | The staking reward stream is fundamentally tied to interest income on Treasury collateral plus fixed emission shares, which does not map cleanly onto an accepted Islamic contract structure and leaves a core riba-related question unresolved. |
| Rewards Structure | 25/100 | Rewards include a fixed share of daily emissions and a revenue-linked payout whose underlying source is interest income, rather than being purely variable returns from halal real economic activity. |
| Documentation | 75/100 | Multiple official documents and blog posts detail lock periods, fee splits, and reward sourcing for USUALx. |
| Shariah Alignment | 15/100 | A decisive Shariah concern remains unresolved because staking rewards are substantially funded by interest income on Treasury-bill collateral, a core riba issue rather than a peripheral one. |
Summary: USUALx is a well-documented native, non-custodial-style liquid staking token with lock-based reward boosts, but its rewards are substantially sourced from interest income, leaving a core Shariah question unresolved.
Overall Assessment: Usual/USUALx is a legitimate, professionally run and well-documented DeFi protocol, but its core revenue and staking rewards are structurally tied to interest income from Treasury-bill collateral, which is the central unresolved Shariah concern for this coin.
Written by ThanvirFounder, Ex Director S&P Global Energy
Reviewed by Imam Omar SiddiqiShariah Scholar