Level

DeFi Stablecoin Protocol

Stablecoin protocol issuing lvlUSD backed by USDC/USDT generating yield from blue-chip DeFi lending.

Type	DeFi Stablecoin Protocol
Region	Global
Status	Sunsetting
Links	Website

M69 Score

M69 Alignment2.4

Minimally aligned

1.02.03.04.05.0

Monetary Sovereignty2.7

Issuance (3x) + Stability (2x) + Fiat Indep. (2x)

Civilizational Durability2.2

Sovereignty + Governance + Resilience

Universal Adoption2.1

Traction (2x) + Inclusivity

Iss Mod3x

3.2

Stability2x

3.0

Fia Ind & Int2x

1.5

Traction2x

1.7

Sovereignty

2.5

Governance

2.0

Resilience

2.0

Inclusivity

2.8

Scored against the Money2069 Manifesto — see methodology. Higher = more aligned.

Key Findings

Weakest category is Fiat Independence (1.5)lvlUSD is a 100% fiat-backed, USD-hard-pegged stablecoin that fails structurally if USDC/USDT/USD fail, with no transition path and no local currency composability. This is the category most fundamentally misaligned with M69's "Global Standard, Local Expression" commandment.

Sovereignty features are mixed but architecturally compromisedlvlUSD is non-custodial at the token level and deployed on permissionless Ethereum, but the contract includes a DENYLIST_MANAGER_ROLE (censorship capability), and multiple multisigs can upgrade, pause, or disable mint/redeem. The system is not shutdown-resistant — and is in fact being shut down.

Notable tensionLevel's best-in-class features (fully on-chain yield transparency, audited contracts, ERC-4626 standard, integration with blue-chip DeFi) show a sophisticated engineering team — but the product was fundamentally a fiat-yield wrapper, not an attempt at monetary innovation. The high Money Design pillar (2.7) reflects mechanical soundness; the low Universal Adoption pillar (2.1) reflects the narrow yield-tourist audience it attracted.

Big takeawayLevel is a cautionary M69 case study — a competently engineered, VC-backed DeFi yield stablecoin that achieved meaningful TVL but never attempted sovereign money design, is now being wound down via acquisition, and should not be considered for M69 alignment investment or partnership. Its infrastructure may persist as acquired code inside another protocol, but lvlUSD itself is exiting the market.

Detailed Rating Breakdown

Framework v0.2-alpha · Rated 2026-04-18

Level (lvlUSD) was a DeFi-native yield stablecoin developed by Peregrine Exploration, launched in Q4 2024 and officially debuted in March 2025. lvlUSD is an ERC-20 stablecoin on Ethereum fully backed 1:1 by USDC and USDT, which are deployed into blue-chip lending protocols (Aave, Morpho) to generate yield. Users could stake lvlUSD into an ERC-4626 vault to receive slvlUSD, which accrued the lending yield (averaging ~7-8% APY). The protocol reached a peak market cap of $185M and over 10,000 users before entering wind-down. In September 2025, the Level team announced it was being acquired by an (unnamed) leading DeFi protocol and that the product would be sunset. The protocol is currently in redeem-only mode with permissioned redemptions, cooldowns reduced to 2 seconds, the last yield distribution on October 2, 2025, and frontend shutdown scheduled for December 15, 2025. This winding down materially impacts Traction, Resilience, and Leadership scores. From an M69 alignment perspective, Level is a fundamentally fiat-dependent, centrally-administered DeFi stablecoin with no sovereign unit of account, no real-economy linkage, no local currency composability, and a censorship-capable denylist on its ERC-20 contract. It addressed short-term USD price stability through overcollateralization and arbitrage but never attempted to anchor purchasing power, support local currencies, or operate independently of fiat banking rails. With its impending sunset, once-promising traction is now collapsing — placing it firmly in the "Minimally aligned" band.

Issuance Model3x

3.2

Code	Question	Score
IM-01	Is issuance permissionless?lvlUSD could historically be permissionlessly minted by depositing USDC/USDT, requiring a non-custodial on-chain collateral action. As of the 2025 sunset, minting is paused and redemptions are permissioned, reducing openness. [1][2]	3
IM-02	Is new supply created through debt?Issuance is deposit-backed (USDC/USDT → lvlUSD 1:1), not a debt/loan model. No borrower pays interest to mint. However, the backing assets themselves are issued as fiat debt claims by Circle/Tether, making the model debt-adjacent rather than fully debt-free. [1][2]	4
IM-03	Is issuance tied to measurable real-world economic activity?Issuance is linked only to fiat stablecoin deposits (USDC/USDT) — purely financial/crypto-native collateral with no real-economy signal, labor, commodity, or production index. [1]	2
IM-04	Does the issuance model have a supply cap or hard ceiling?No hard cap; supply elastically expands and contracts with mint/redeem flows, but is bounded only by user deposits, not by economic signals or circuit breakers. [1][2]	3
IM-05	Can supply contract (burn/redemption) as well as expand?Two-way supply mechanism: mint burns collateral deposit, redemption burns lvlUSD to return USDC/USDT. User-initiated and permissionless in the active phase (now permissioned during sunset). [1]	4

Spending Power Stability2x

3.0

Code	Question	Score
SPS-01	What mechanism does the protocol use to target spending power stability?2× Arbitrage-driven peg to $1 via overcollateralized mint/redeem at par, with whitelisted redeemers; reactive rather than fully algorithmic and tied to an index. [1]	3
SPS-02	What benchmark is used to measure spending power?2× Pegged to USD — a single fiat reference with meaningful multi-year inflation; moderate stability but not a broad real-economy basket. [1][2]	2
SPS-03	How transparent and verifiable is the stability measurement?1× Collateral (USDC/USDT, aUSDC, Morpho receipts) is on-chain and auditable; Chainlink oracles used for mint/redeem pricing; audit by 0xmacro. Some reserve strategy allocation off-chain disclosed. [1]	4
SPS-04	What is the protocol's historical deviation from its stability target?2× Launched Q4 2024 — under 1 year live at sunset; peg largely held within ~20bps slippage band per frontend guard, with no major publicly documented depeg. Short track record. [1]	3
SPS-05	Does the protocol distinguish between short-term volatility and long-term purchasing power drift?1.5× Targets short-term $1 price stability only; long-term purchasing power preservation not addressed in design — slvlUSD yield is marketed as an investment return, not an inflation hedge. [1]	3
SPS-06	Is the stability mechanism accessible globally?1× Permissionless mint/stake during active phase and global accessibility in principle, but explicitly "Not available for US persons" and redemptions are whitelisted. [1][2]	4

Fiat Independence & Interoperability2x

1.5

Code	Question	Score
FI-01	What is the protocol's unit of account?2× Hard-pegged 1:1 to USD; no independent unit of account. [1][2]	1
FI-02	What is the fiat composition of the protocol's collateral or reserves?2× 100% fiat-backed — reserves are USDC and USDT, deployed in Aave/Morpho as aUSDC and equivalents. No non-fiat collateral. [1][2]	1
FI-03	Does the protocol depend on fiat banking infrastructure to function?1× Core protocol runs on-chain and does not directly operate bank accounts, but its entire reserve base (USDC/USDT) is dependent on Circle and Tether's banking relationships. Meaningful indirect dependency. [1]	3
FI-04	Are the protocol's price feeds and oracles fiat-denominated?1× Uses Chainlink oracles for USDC/USDT and USD denominations — all price feeds fiat-denominated but sourced from a decentralized oracle network. [1]	2
FI-05	What happens to the protocol if the primary fiat currency it references collapses or depegs?1× Protocol fails structurally if USDC/USDT/USD fail — the reserves, unit of account, and yield-generating assets are all USD-denominated with no hedge. [1]	1
FI-06	Does the project have a credible transition path from fiat-dominated adoption to fiat-independent operation?1× No documented transition plan away from fiat; fiat collateral treated as permanent. Project marketed as "DeFi-native yield on USDC/USDT" — fiat dependence is the product. [1]	1
FI-07	Can local or sectoral currencies be denominated in or settle against this currency?2× Monolithic USD-pegged design; no architecture or interest in enabling local or sectoral currencies. [1]	1
FI-08	Does the protocol define open standards for interoperability with other monetary systems?1.5× Standard ERC-20 on Ethereum; integrations with Pendle, Spectra, LayerZero, Morpho enable generic crypto interop but no protocol-specific monetary interoperability standard. [1]	3

Traction2x

1.7

Code	Question	Score
TR-01	Is the project still active?2× Team has announced acquisition; product is being sunset with redeem-only mode, last yield paid Oct 2, 2025, frontend shutdown Dec 15, 2025. Effectively defunct. [1][2]	1
TR-02	How long has the project been in existence?1× Beta launched Q4 2024, official debut March 2025 — approximately 1 year from launch to sunset. [1]	2
TR-03	How many active users does the project have?2× Reached over 10,000 institutional and retail users at peak per CoinDesk reporting; declining due to sunset. Falls in 10K–100K bracket. [1]	3
TR-04	How many businesses or organizations accept the project's currency?2× No meaningful merchant adoption documented; usage is held/traded and used as DeFi collateral, not accepted by businesses.	1
TR-05	Is the currency used as a unit of account?3× Always priced as $1 USD equivalent; no native denomination of goods, wages, or contracts in lvlUSD. [1]	2
TR-06	Is the founder or core team still actively working on the project?1× Team publicly announced they are being acquired by another DeFi protocol and sunsetting Level; active stewardship of Level itself is ending. [1]	1
TR-07	What partner organizations or institutions support or integrate the project?1× Integrations with Aave, Morpho, Pendle, Spectra, LayerZero; backed by Dragonfly, Polychain, Blockchain Founders Capital, Flowdesk — 10+ meaningful partners. [1][2]	4
TR-08	Is the project covered or recognized by credible external sources?1× Covered by CoinDesk, The Block, Messari, PRNewswire — specialist crypto media coverage but no peer-reviewed research or mainstream policy citation. [1][2]	3
TR-09	Is adoption organic — not dependent on subsidies, incentives, or mandates?1× Adoption was primarily driven by high DeFi yield (7-8% APY), points programs, and expected airdrop — incentive-driven rather than organic utility. [1][2]	2
TR-10	What is the growth trend over the past 12 months?1× After reaching $185M peak market cap, protocol is in sharp decline due to sunset announcement and redeem-only status; users exiting. [1]	1
TR-11	Does the project have a coherent narrative and cultural identity that drives long-term commitment?1.5× Community was mercenary, driven by yield and airdrop speculation; no cultural artifacts, rituals, or mission-driven identity beyond "DeFi-native yield." [1]	1

Sovereignty

2.5

Code	Question	Score
SO-01	Can any single entity shut down the project?2× Admin Multisig (5/8 timelocked) can upgrade contracts, pause, and disable minting/redeeming. While multisig reduces single-entity risk, the protocol team could disable core functions — and is in fact shutting it down. [1]	2
SO-02	Is the project's core infrastructure permissionless and self-hostable?1× Contracts deployed on Ethereum and audited by 0xmacro; code is publicly verifiable. Runs on permissionless L1 but frontend and parameterization controlled by operator. [1][2]	4
SO-03	Is the project subject to the jurisdiction of a single nation-state?1× "Not available for US persons" indicates US regulatory avoidance; Peregrine Exploration jurisdiction not publicly disclosed. Concentrated legal exposure plausible but not clearly multi-jurisdictional by design. [1]	2
SO-04	Does the project control or custody user funds?2× lvlUSD token is user-held ERC-20 (self-custody). Reserves deployed to Aave/Morpho controlled by protocol contracts, not operator EOA. Non-custodial by default with operational controls on reserve deployment. [1][2]	4
SO-05	Is the project resilient to key-person risk?1× Centralized team (Peregrine Exploration, CEO David Lee); entire team is departing via acquisition, materially impairing the project. High key-person dependency. [1][2]	2
SO-06	Does the project depend on any third-party service that could be revoked?1× Depends on USDC (Circle), USDT (Tether), Aave, Morpho, Chainlink oracles, Hexagate GateKeepers (AWS-hosted), and Ethereum. Multiple critical third-party dependencies, any of which could freeze underlying assets (USDC blacklist precedent). [1][2]	2
SO-07	Can the project be censored — can specific users or transactions be blocked?1.5× lvlUSD contract includes a DENYLIST_MANAGER_ROLE allowing blacklisting of addresses; Admin multisig can remove user roles and pause functionality. Censorship capability built in. [1][2]	2
SO-08	Does the protocol protect transaction privacy as a monetary right?1.5× Standard Ethereum pseudonymity; transaction history publicly visible but not linked to identity by the protocol itself (except where KYC/whitelisting applies for redemption). [1]	3
SO-09	Does the technology enforce the project's monetary rules such that governance cannot silently override them?2× Monetary rules are on-chain smart contracts; Admin multisig (5/8 timelocked) can upgrade contracts and change parameters, with some public logging. Mid-tier enforcement — silent override limited by timelock but not impossible. [1]	3

Governance

2.0

Code	Question	Score
GO-01	How are decisions about the project made?2× No on-chain governance process; decisions made by Peregrine Exploration team via multisigs (Admin 5/8, Operator 2/5, Treasury 3/4). Informal team decision-making. [1]	2
GO-02	Who has voting or decision-making power, and how is that power distributed?1× Power concentrated across internal team multisigs with some third-party signers; no community voting or broad-based participation. [1]	2
GO-03	Is the governance process — and the monetary mechanism itself — transparent and publicly auditable?2× Monetary mechanism (contracts, reserves, oracles) is on-chain and open-source. Governance deliberations themselves occur in closed team channels; sunset announced via X/docs after decision. [1][2]	3
GO-04	Can governance be captured by a small group or hostile actor?1.5× Governance is already structurally held by a small group (multisig signers); no token governance exists to be captured but also no broad community defense against insider decisions. [1]	2
GO-05	How are upgrades and changes to the protocol or project proposed and executed?1× Admin Multisig (5/8) has timelocked upgrade authority, but no formal community proposal process, public debate period, or binding vote. [1]	3
GO-06	Is there a separation between governance over monetary policy and governance over operational decisions?1× No formal separation; multisigs have different operational scopes (Admin vs Operator vs Treasury) but monetary rule changes flow through the same entity types as operational changes. [1]	2
GO-07	Does the project have a constitution, charter, or set of immutable principles?1.5× No published constitution or charter; mission statements exist in blog/marketing but have no binding or immutable force. [1]	1
GO-08	Can the project's issuance rules be changed, and are monetary policy changes subject to stronger constraints than operational changes?2× Admin Multisig can upgrade issuance-related contracts with timelock; no stronger constraint on monetary vs operational changes. [1]	2

Resilience

2.0

Code	Question	Score
RE-01	Has the project survived a major crisis or adversarial event?2× No major crisis survived; project is being voluntarily sunset via acquisition rather than stress-tested. Untested in adversarial conditions. [1]	1
RE-02	Does the project have redundancy in its critical infrastructure?1× Runs on Ethereum with redundant validator set, but frontend, oracle configuration (Hexagate GateKeepers on AWS), and team operations are single points of failure. [1]	2
RE-03	Can the project recover from a catastrophic failure?1× Smart contracts are deployed and verifiable on Ethereum; users can interact directly via contract during frontend shutdown, demonstrating some recovery capability. No formally documented DR plan published. [1][2]	3
RE-04	Is the project's design simple enough to be maintained and understood long-term?1× Core design is a standard collateralized stablecoin + ERC-4626 vault — moderately complex with integrations across Aave, Morpho, multiple oracles. Documentation exists but expertise required. [1]	3
RE-05	Is the project dependent on a specific technology that could become obsolete?1× Built on Ethereum (large ecosystem) + specific DeFi money markets (Aave, Morpho); major widely-supported stack but no tested migration path away from these. [1]	3
RE-06	How does the project handle economic stress (bank runs, liquidity crises, collateral crashes, inflation/deflation shocks)?2× Relies on arbitrage and full collateralization; redemption permissioning and cooldowns provide some wind-down capability. No circuit breakers for macro stress, no tested live stress response. [1][2]	2
RE-07	Does the project have sustainable funding for long-term maintenance?1.5× Project funded by $6M+ VC capital; being wound down rather than self-sustaining. Effectively no long-term funding model. [1][2]	1
RE-08	Can the system operate across extreme latency, disconnected networks, and multi-century timescales?1× Requires continuous Ethereum L1 availability and real-time oracle feeds; not designed for high-latency or partition-tolerant operation. [1]	2
RE-09	Is the system designed for a world where AI agents are primary economic actors?1× Fully programmable ERC-20 + ERC-4626 standard interfaces; AI agents can transact, mint (during active phase), stake, and redeem without human-specific requirements at protocol level. [1]	4

Inclusivity

2.8

Code	Question	Score
IN-01	Can anyone in the world participate regardless of nationality, wealth, or status?2× "Not available for US persons"; redemptions now permissioned/whitelisted. Open to most other geographies with no minimum balance but meaningful geographic and permissioning gates. [1][2]	3
IN-02	What is the minimum cost to start using the project?1× Ethereum L1 gas costs (typically $1–$10+ per transaction) create a moderate barrier; no minimum balance imposed by protocol. [1]	3
IN-03	Does the project actively serve underbanked or financially excluded populations?1× Targets DeFi-native yield farmers and institutions; no design choices, outreach, or deployment aimed at underbanked populations. [1][2]	2
IN-04	Does the project distribute economic benefits — including seigniorage — broadly, or concentrate them among insiders?1.5× Lending yield flows to slvlUSD stakers; however, equity held by VCs (Dragonfly, Polychain) and the team captures protocol value on acquisition. Morpho token rewards retained by Level rather than passed through. Meaningful insider allocation. [1][2]	2
IN-05	Does the project treat all participants equally under the same rules?2× Whitelisted redemption creates a tiered system — arbitrageurs with permissioned access vs regular holders who must exit via secondary markets; core minting/staking was equal during active phase. [1][2]	3
IN-06	Does the project require identity documentation or surveillance to participate?1.5× Holding and staking lvlUSD at the contract level is pseudonymous; KYC/whitelisting applies only to permissioned redeemers and fiat on-ramps for USDC/USDT. [1][2]	4
IN-07	Does the project have mechanisms to prevent wealth concentration over time?1× Staking rewards are proportional to slvlUSD holdings — larger holders compound at same rate, passively encouraging concentration with no counter-mechanism. [1]	2

Frequently Asked Questions

What is Level and what problem does it solve?

How is money created in Level?

lvlUSD could historically be permissionlessly minted by depositing USDC/USDT, requiring a non-custodial on-chain collateral action. As of the 2025 sunset, minting is paused and redemptions are permissioned, reducing openness.

How does Level maintain stable spending power?

2× Arbitrage-driven peg to $1 via overcollateralized mint/redeem at par, with whitelisted redeemers; reactive rather than fully algorithmic and tied to an index.

Is Level independent from fiat currencies?

2× Hard-pegged 1:1 to USD; no independent unit of account.

Who controls Level and can it be shut down?

2× Admin Multisig (5/8 timelocked) can upgrade contracts, pause, and disable minting/redeeming. While multisig reduces single-entity risk, the protocol team could disable core functions — and is in fact shutting it down.

How widely adopted is Level today?

2× Reached over 10,000 institutional and retail users at peak per CoinDesk reporting; declining due to sunset. Falls in 10K–100K bracket.

Is Level still active and growing?

2× Team has announced acquisition; product is being sunset with redeem-only mode, last yield paid Oct 2, 2025, frontend shutdown Dec 15, 2025. Effectively defunct.

What are the main risks or weaknesses of Level?

Weakest category is Fiat Independence (1.5): lvlUSD is a 100% fiat-backed, USD-hard-pegged stablecoin that fails structurally if USDC/USDT/USD fail, with no transition path and no local currency composability. This is the category most fundamentally misaligned with M69's "Global Standard, Local Expression" commandment.

What makes Level unique from an M69 perspective?

Strongest: Issuance Model (3.2).

How is Level's M69 Score calculated?

Level scores 2.4/5.0. Pillars: Monetary Sovereignty 2.7, Civilizational Durability 2.2, Universal Adoption 2.1. Strongest: Issuance Model (3.2). Weakest: Fiat Independence (1.5).