BitWell AMA | Introducing SperaxUSD: $USDs the stablecoin with Auto-Yield
On April 29th, Alec Shaw, Partner of SperaxUSD visited the BitWell community and brought a wonderful sharing with the theme “SperaxUSD: the stablecoin with Auto-Yield”.
The following is a review of the full content of this community sharing!
1.Could you please give us a brief introduction of the Sperax and what problems it intends to solve?
Sperax is a software development team building open source financial software. We are dedicated to benefiting all financial lives with public blockchain technology.
Sperax is the open-source development team focused on building software products on the Sperax protocol. With the Sperax token ($SPA) at its core, Sperax has built the first ever auto-yield stablecoin, $USDs!
Currently, defi is VERY hard to interact with and it leaves the whales with all of the gains. We don’t like this.
So we are building defi products that are super easy to use and highly lucrative without being volatile. So our first product USDs automates defi so the end user just has to hold USDs (stablecoin) and they will be paid 11% passive income in USDs!
Stablecoin yield shouldn’t be hard, so we built USDs, the auto-yield stablecoin.
2. What is Sperax’s main roadmap for 2022?
In the 2022 roadmap, Sperax’s first major milestone was to expand the token ecosystem by introducing the veSPA staking protocol, modeled on Curve Finance’s veCRV. This went super well and features an 700% APY for users who locked SPA for 4 years. (Q1)
New incentives & rewards will be allocated to those who participate in minting and providing USDs liquidity, including traditional yield farming rewards (like our saddle. Exchange pool paying 50% on stables from SPA and SDL) plus new models like the internet bond allowing users to get a discount when minting USDs. (Q2)
VeSPA is the foundation for SperaxUSD as we go cross-chain to major L1 ecosystems like Avalanche, Ethereum, Polygon, Fantom, and more. (Q3)
As we expand the cross-chain, we will replicate the incentive programs with all partner chains.
This is all in addition to basic infrastructures like Data Dashboards, Collateral Diversification, and trading pairs in Arbitrum, so USDs can easily swap for your favorite cryptos. We are working with partners to build a savings product like Anchor for users to earn passive income on their stablecoins with fiat on-ramps.
That is the plan, we work all day every day to continue building and achieving milestones. We just hit $25M TVL! Another major milestone complete.
3.I am curious to know what inspired you to design Sperax?
It’s a lot of info so I want to make it (kind of) easy haha
Nico (our lead econ researcher) was one of the early team members and a huge supporter of Terra (he even lived in Seoul for a year to work with the team)!
He was fascinated by the elegant design of algo stablecoins and wanted to preserve the scalability and economic benefits they offer. At the same time, though, algo stablecoins tend to suffer from reflexivity. The stablecoin is backed only by the governance token in a purely algorithmic system. However, the governance token is valuable only to the extent the system continues to operate and captures future profits. If heavy redemptions affect investors’ belief in the system, the stablecoin will suffer, which will cause even more redemptions, creating a death spiral. The case of Iron/Titan was an example of that and the total failure of Basis Cash. This risk of purely endogenous collateral is something that even Terra has recognized, hence introducing a BTC reserve fund.
Sperax design introduces that hybrid model explicitly in its design to minimize the probability of a belief-driven crisis while also utilizing that excess capital to generate yield for holders of the stablecoin and incentivize adoption!
In summary, other stablecoins have some inherant risks that we don’t believe stablecoin holders are aware of. We remove those risks to make USDS incredibly safe and also yield bearing.
We did this so people can access stablecoins SAFELY and EASILY
Nico, our econ researcher is always happy to share more details about his time working at Terra and how his learnings are helping design Sperax USD!
4.I would like to know about the uses of the $SPA token What role does a token play in Sperax ecosystem? What are the advantages for holders?
The SperaxUSD protocol has an elegant two token system. This system features two tokens.
1) Yield bearing stablecoin: $USDs — pegged to $1 and new $USDs is added directly to the user wallet.
2) Governance and economic buffer token: $SPA — fluctuates in market price and is used to govern the protocol and keep $USDs $1 peg.
$SPA plays a very important role in keeping $USDs pegged to $1 and the SepraxUSD open, decentralized and censorship resistant
As $USDs grows, a small amount of $SPA is required to be burned. This means as $USDs grows, the protocol will control more value in the reserves, but there will be less units of $SPA in the market due to the burn.
Finally, $SPA is used to govern the protocol. This is very important because SperaxUSD operates completely on-chain and will soon be managed completely by DAO and on-chain token votes. This means that no central party is able to upgrade or change the rules of the protocol without a public vote.
5.How does the veSPA protocol work? Please tell me how SPA accrues value with USDs adoption?
That’s an excellent question because it highly complements the previous one!
In a nutshell veSPA is the protocol that makes SPA a productive asset whose value is linked to USDs adoption!
veSPA is the governance model of Sperax. At the moment, it can be accessed from Arbitrum and Ethereum and last week’s yield was a bit over 700% APY the 4-year lockup.
It’s a popular governance model that protocols like Curve, Frax and Anchor have chosen. Effectively the model asks users to temporarily lock their SPA in return for veSPA. The longer someone locks their SPA, the more veSPA they will receive. veSPA will be used:
- To vote or propose governance proposals. People will be able to choose collateral that will be used to back USDs, suggest changes in the investment strategies of the collateral, as well as choose different yield generating strategies.
- veSPA holders will get all the minting and redeeming fees associated with USDs proportional to their veSPA holdings.
- veSPA holders will get 50% of the yield generated from the collateral generated by USDs (the number is subject to change by future governance decisions) proportional to their veSPA holdings.
Effectively veSPA will truly decentralize the Sperax model, generate a steady source of passive income and directly link the growth of the Sperax stablecoin ecosystem to the value of SPA.
As the protocol grows, the higher and higher share of the veSPA rewards will be given because of USDs revenue (fees and 50% of the yield on TVL).
All rewards are denominated in SPA terms. This means that every week we use all the revenue generated from USDs to buyback spa from the open market and reward the stakers. As USDs grow, so will the buybacks and the staking APY!
Effectively staking SPA will allow users to take a long position on USDs adoption! A risky bet with asymmetric upside, in my opinion!
6.So why is this listing important for the growth of SperaxUSD?
Well we are firm believers that blockchain technology, powered by public blockchains, have the power to radicly change the financial landscape
Specifically, we belive that public blockchains like Ethereum and protoocl on top of them like SperaxUSD have the potential to transfer wealth from those who have it to thos who need it.
With the democratization of high-yield, non-volatile financial instruments low/middle class citizens can compete against those players who may have different access to banking and financial services.
So this is all great, but many people still have a hard time getting the actual assets in their wallet. So we believe that partnerships like with Bitwell allow users to get Sperax assets on the exchange of their choice, unlocking the financial power of defi without being limited to some excahnge they don’t prefer to get it
So we want to be listed on as many exchanges and on-ramps as possible so no one is blocked from accessing new financial superpowers
Community Live Q&A
1.Do the token holders have the right to participate in the governance of the project? What kind of decisions can they vote on about the project?
SPA token holders have a very important responsiblity in the ecosystem, which is to grow the appeal and utility of USDs. If this is done successfully and demand for USDs GROWS, the value of SPA will greatly increase as well thanks to the connection between the growth and value accrual in the veSPA model.
veSPA stakers control key parameters such as what type of collateral the protocol uses to back USDs, how that collateral is deployed in defi to generate auto-yield, and how we use SPA reserves to incentivize use of the stablecoin via partnerships, yield farms, listings and more
2.What is your strongest advantage that you think will make your team leading the market?
Partner of Tech Coordination. I coordinates our engineering team with other teams like product team, econ team, marketing&BD team, etc. Glad to be here today.
First person besides the zcash team that has a IEEE published blockchain paper.
Lead econ researcher.
Harvard Business School professor, Terra white paper co-author.
Partner of Business Development here at Sperax. I help secure partnerships, exchange listings and collaborations with other defi protocols!
I got into crypto in 2015 when I started the Blockchain Lab at Marquette University when I was a student. I was first a trading club then turned into a consulting firm, run by University students.
Nicolas Andreoulis — Researcher of Sperax
I had a background in academic research. I was a research fellow with a focus in financial macroeconomics at LSE and Princeton. Sperax, at the moment, is centered around USDs and the broader adoption of decentralized stablecoins! Since I led the stablecoin design, I think I can better address it! As a side piece of information, we also have our own layer 1 infra on testnet, but since this is not the current focus of the project, I will limit my answer to the Sperax/ USDs relationship!
I was one of the early team members and a huge supporter of Terra (I even lived in Seoul for a year to work with the team). I was fascinated by the elegant design of algo stablecoins and wanted to preserve the scalability and economic benefits they offer. At the same time, though, algo stablecoins tend to suffer from reflexivity. The stablecoin is backed only by the governance token in a purely algorithmic system. However, the governance token is valuable only to the extent the system continues to operate and captures future profits. If heavy redemptions affect investors’ belief in the system, the stablecoin will suffer, which will cause even more redemptions, creating a death spiral. The case of Iron/Titan was an example of that and the total failure of Basis Cash. This risk of purely endogenous collateral is something that even Terra has recognized, hence introducing a BTC reserve fund. Sperax design introduces that hybrid model explicitly in its design to minimize the probability of a belief-driven crisis while also utilizing that excess capital to generate yield for holders of the stablecoin and incentivize adoption!
Built trust token among other consumer facing defi/crypto apps. Best UX around.
3.Liquidiity:Transaction fees and slippage have always been important factors in Finance services. How does #SPERAXUSD solve the above problems to attract users?
Great question. In order to make USDs stable we need very deep liquidity for the stablecoin and the governance token SPA.
To do this we have many different yield farms! Users can earn up to 250% APY on SPA and up to 30% APR on USDs!
All farms can be found at app.sperax.io/farms
4.I see that uses who will hold USDs in their wallet, They will receive passive income on it, Will all holders received or there is any Specific amount that users need to hold for it..?
Great question!! There is no minimum to earn the USDs passive income
This means that everyone, even the user with just $1 USDs in their wallet will earn auto-yield payments at 11% APY
5.Audit is important for both trust and security. Have you done any audit of smart contract?
Yes. We take security as #1 priority.
You’ll find our audit reports here 🙂 https://github.com/Sperax/Audit_Reports
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