What is Sperax (SPA)?

What is Sperax (SPA) and How Does it Work?

Sperax (SPA) is an innovative dual-token algorithmic stablecoin protocol that aims to bring a scalable, trustless, and decentralized cryptocurrency to the rapidly growing decentralized finance (DeFi) space. The protocol consists of two distinct tokens: USDs, a stablecoin pegged to the US Dollar, and SPA, a governance and value accrual token. The primary function of the SPA token is to maintain stability and ensure the efficient functioning of the system.

The stability mechanism behind SPA combines both algorithmic and collateral-based approaches, ensuring capital efficiency and rapid scalability in the cryptocurrency market. By borrowing insights from crypto-collateralized stablecoins like DAI and dual-token algorithmic stablecoins, SPA aims to resolve issues faced by existing stablecoins such as high volatility, bootstrapping challenges, and scalability limitations.

SPA’s USDs stablecoin is explicitly collateralized by a pool of existing stablecoins and other crypto assets, while the SPA token is utilized to stabilize the uncollateralized component algorithmically. The protocol relies on a combination of collateral and algorithmic mechanisms, adjustable interest rates, and swap functionality to maintain the stablecoin’s peg and ensure that it trades within a tight range.

In SPA’s dual-token system, the Sperax protocol offers a stablecoin (USDs) and a governance/value accrual token (SPA). The USDs stablecoin is collateralized by a mix of existing stablecoins and other crypto assets, which are selected through a dual-process model consisting of screening portfolio optimization and collateral ratio simulations. The system considers the volatility of collateral and the probability of under-collateralization for each asset when determining the optimal collateral mix at launch.

Source: Sperax Documentation

The stability levers in the SPA protocol play a crucial role in maintaining the peg of the USDs stablecoin. When USDs trade at a premium on exchanges, interest rate payments increase, causing higher inflation and selling pressure, which pushes the price downwards. In contrast, when the price of USDs drops below the peg, interest rates decline, encouraging users to burn their existing USDs and buy USDs from exchanges to burn them. The combination of these stability levers, along with the protocol’s market maker and interest rate mechanism, ensure that USDs trade within a tight range of the peg.

SPA’s protocol also incorporates DeFi yield aggregators, which enable users to automate the process of deploying assets into the most lucrative yield farming opportunities. USDs holders can earn passive income from the protocol through yield aggregators, which invest the locked collateral in high-return yield farming ventures.

By offering a highly scalable, trustless, and decentralized stablecoin protocol that combines algorithmic and collateral-based approaches, SPA aims to revolutionize the world of stablecoins and DeFi. The unique dynamic reliance on both crypto collateral and algorithmic stability allows the protocol to adapt to market conditions in real time, providing a stable and efficient cryptocurrency solution for the ever-evolving DeFi ecosystem.

History of Sperax, Origins and Key Person on SPA

The story of Sperax and its innovative stablecoin protocol, SPA, began in 2020 when the company was founded and headquartered in New York City. Initially, the Sperax team focused on creating a Layer 1 blockchain, but soon shifted its attention to developing the first auto-yield bearing stablecoin called Sperax USD (USDs).

In December 2021, Sperax released USDs on the Layer 2 solution, Arbitrum, taking advantage of the scalability and lower transaction costs that this platform offered. With USDs residing on-chain, it is backed by a combination of collateral and an algorithmic stability mechanism that allows the protocol to mint $1 worth of SPA when redeeming $1 of USDs. This innovative approach brings together the scalability benefits of algorithmic stablecoins and the stability advantages of collateralized stablecoins.

One of the most notable features of USDs is its native auto-yield capability. USDs holders automatically earn yield without having to stake or claim their tokens, as the yield is organically generated from the collateral deployed on external DeFi protocols like Curve Finance.

Sperax’s roadmap envisions constructing a full-stack DeFi ecosystem based on USDs. As the USDs ecosystem expands through organic growth and strategic partnerships, the Sperax team plans to revitalize the Layer 1 blockchain conceived during the company’s early stages.

Backing Sperax’s innovative approach and ambitious goals is an impressive lineup of investors, including Polychain Capital, Jump Trading, Alameda Research, Amber Group, and even DJ Steve Aoki. This strong support from industry leaders highlights the potential of Sperax and its SPA protocol to make a significant impact on the world of decentralized finance.

How does Sperax work?

SPA is most commonly known for its groundbreaking dual-token algorithmic stablecoin protocol that aims to revolutionize the DeFi landscape. The protocol offers a trustless, decentralized, and highly scalable stablecoin solution, distinguishing itself from other stablecoins by efficiently addressing the challenges faced by its predecessors.

One of the key innovations of SPA is its unique approach to achieving stability. By borrowing insights from crypto-collateralized stablecoins like DAI and dual-token algorithmic stablecoins like Terra, SPA merges the best features of both worlds. The USDs stablecoin is explicitly collateralized by a pool of existing stablecoins and other crypto assets, while the SPA token implicitly stabilizes the uncollateralized component through algorithmic mechanisms.

SPA is also known for its dual-process model of selecting optimal collateral, which ensures that the protocol’s reserves experience high growth, low volatility, and low correlation with each other. This model combines screening portfolio optimization with collateral ratio simulations based on historical price data, resulting in an efficient collateral composition.

Another standout feature of SPA is its utilization of decentralized yield aggregators, which provide passive income opportunities for USDs holders. By leveraging external yield aggregators like yearn.finance and Anchor, SPA enables users to maximize their returns by automating the deployment of assets into the most profitable yield farming strategies.

SPA’s focus on maintaining a stable peg for the USDs stablecoin has garnered significant attention. The protocol employs stability levers, adjustable interest rates, and swap functionality to ensure that the USDs trade within a tight range of its peg to the US Dollar. This combination of stability mechanisms allows the SPA protocol to respond dynamically to market conditions, providing users with a stable and reliable cryptocurrency experience.

How does Sperax Work? From Dual-Token System to Full-Stack DeFi Ecosystem

Sperax USD (USDs) and its native SPA token offer a range of use cases and features designed to benefit users and enhance the decentralized finance ecosystem. Here are some of the most prominent use cases and features of the Sperax protocol.

• Dual-Token System: The Sperax protocol employs a dual-token system comprising USDs, the stablecoin, and SPA, the governance, and value accrual token. This structure ensures a stable, scalable, and trustless decentralized stablecoin protocol.
• Collateralized and Algorithmic Stability: USDs are explicitly collateralized by a pool of existing stablecoins and other crypto assets, while also being implicitly stabilized by the protocol’s ability to mint and burn SPA algorithmically. This hybrid approach combines the benefits of collateralized and algorithmic stablecoins, ensuring high stability and scalability.
• Auto-Yield Generation: USDs holders automatically earn yield without having to stake or claim their tokens. The yield is generated organically from the collateral deployed on external DeFi protocols, such as Curve Finance, yearn.finance, and Anchor, allowing users to benefit from passive income.
• Optimal Collateral Management: The Sperax protocol utilizes a dual-process model for selecting and optimizing collaterals. This approach involves screening for insignificant assets, followed by a portfolio optimization algorithm that determines the optimal weights for each collateral, ensuring the reserve composition remains on the efficient frontier with a maximum Sharpe ratio.
• Stability Levers: The protocol employs an interest rate mechanism and a protocol market maker with swap functionality to ensure that USDs trades within a tight range of its peg. These stability levers help maintain the value of USDs close to $1, regardless of market conditions.
• Decentralized Governance: Sperax’s governance model allows for decentralized decision-making through a DAO process, empowering the community to shape the protocol’s future.
• Full-Stack DeFi Ecosystem: Sperax’s roadmap includes building a comprehensive DeFi ecosystem based on USDs, enabling users to access various financial services, including lending, borrowing, and asset management, in a decentralized and trustless environment.

With these use cases and features, Sperax and its innovative SPA protocol aim to revolutionize the DeFi landscape by offering a stable, scalable, and user-friendly stablecoin that caters to the needs of various participants in the decentralized finance space.

Sperax Main Features: Demeter and Sperax Gauge

Demeter

Demeter Protocol is a revolutionary new platform that empowers decentralized autonomous organizations (DAOs) to launch and manage liquidity pools on major decentralized exchanges (DEXs) like Uniswap V3 without the need for coding skills. With the power to launch incentivized liquidity pools on Uniswap V3, future versions of Demeter will support custom liquidity shapes on DEXs like Balancer, Saddle, and Sushiswap. Demeter V1 is currently available on Arbitrum, with plans to expand to Ethereum, Optimism, and Polygon in the future.

The protocol automates the key aspects of launching and managing decentralized exchange liquidity, including engineering support to launch and manage the farm, marketing support to make the community aware of the new farm, and financial support through SPA incentives. Farmers launching their farms through Demeter benefit from being whitelisted on the Demeter active farms dashboard, which features all the farms that are actively distributing rewards deployed with Demeter. The protocol offers a discounted fee for launching farms against USDs or SPA, and fixed SPA emissions from the SPA gauge to boost the farm APR.

Incentivized liquidity pools on Uniswap V3 allow DAOs to benefit from concentrated liquidity, which offers less slippage than diluted liquidity, translating to a lower emissions budget for other protocols and much more fees for LPs. With Demeter, DAOs can launch a Uniswap V3 farm without coding skills and get marketing and financial support from Sperax. Demeter charges a discounted fee of $50 for launching farms against USDs or SPA, and a $100 fee for other farms, which will be used to burn SPA and reduce its supply.

Sperax Gauge

Sperax Gauge is a revolutionary new feature that provides a unique and powerful reward mechanism for USDs trading pairs, and it has many advantages for DAOs and liquidity providers on the Arbitrum blockchain. Let’s explore some of the key features of the Sperax Gauge and how they can benefit users:

• Automated Liquidity Provision: Sperax Gauge provides automated liquidity provision for USDs trading pairs, enabling users to launch their tokens on-chain and improve their liquidity without the need for coding skills.
• Financial Support: The SPA Gauge system provides financial support through fixed SPA emissions from the SPA gauge, boosting the farm APR, and discounted fees for launching farms against USDs or SPA.
• Marketing Support: Projects launching their farms through Demeter and the SPA Gauge system benefit from being whitelisted on the Demeter active farms dashboard, making it easier to attract farmers and liquidity providers.
• Customizable Liquidity Shapes: Future versions of Demeter and the SPA Gauge system will support custom liquidity shapes on major DEXs like Balancer, Saddle, and Sushiswap, giving users even more flexibility and customization options.
• Multi DEX Support: The SPA Gauge is DEX agnostic and can attach to USDs pairs on any DEX, which is a unique feature. The second integration will be with Camelot, allowing users to execute a fair launch on Camelot and Demeter.
• Gauge Voting: veSPA holders participate in a weekly vote determining how many SPA rewards are distributed to each pool. Users vote whenever they wish, but the on-chain snapshot of the votes will be taken every Thursday at 12:00:00 UTC.
• Bribing Voters: The SPA Gauge system allows veSPA holders to accept bribes for voting on specific gauges. Young DAOs can use their governance token to bribe veSPA holders for SPA rewards, and any DAO can bribe for rewards and liquidity.
• Driving Value to SPA: The SPA Gauge incentivizes USDs circulating supply growth directly, increasing SPA demand, and buyback, and decreasing SPA supply.

Source: Sperax Documentation

Sperax Gauge is a revolutionary new feature that provides a unique reward mechanism for USDs trading pairs, allowing users to improve their liquidity and launch their tokens on-chain with ease. With its user-friendly interface, automated features, and financial and marketing support, Sperax Gauge is poised to become a popular choice for DAOs and liquidity providers looking to participate in the DeFi ecosystem on the Arbitrum blockchain.

Is SPA a Good Investment?

Sperax (SPA) stands out as a blockchain platform that takes a unique approach to addressing scalability, interoperability, and sustainability issues faced by existing blockchain networks.

In addition to its unique approach, Sperax is highly interoperable, allowing it to interact seamlessly with other blockchain networks and traditional financial systems. This makes it an attractive platform for businesses and organizations that require cross-chain functionality. Its user-friendly DeFi applications also make it accessible to a broader audience.

Moreover, Sperax has already made significant strides in the blockchain space through its partnerships and collaborations with the Chinese government and leading DeFi projects like Compound and Aave. These partnerships highlight Sperax’s potential to provide innovative solutions to real-world problems.

How can you own SPA?

Going through a centralized cryptocurrency exchange is one approach to acquiring SPA. The first step is to create a Gate.io account and complete the KYC process. Once you have deposited money into your account, follow the instructions to purchase SPA on the spot or futures market.

News on SPA

• SperaxDAO received an allocation of 1.8M ARB tokens during the Arbitrum token generation and airdrop event, valued at over $2,000,000.
• Gate.io listed SPA for cross-margin trading, allowing users to borrow SPA against collateral and increase trade volume on the platform.
• SperaxDAO and Arable officially announced their partnership during an AMA, with ACRE/SPA, ACRE/USDs, and arUSD/USDs pools coming to Demeter soon.
• OnMeta, a new onramp partner, allows users to directly onboard from Indian Rupee accounts to USDs.
• The ARB/USDs Yield Farm offers nearly 100% APR paid in ARB tokens, sponsored by the Sperax Foundation.
• Handle.Fi listed USDs as collateral on their FX exchange, enabling users to post yield-bearing USDs for various trades.
• SperaxDAO is one of four protocols offering rewards for the L2D4 pool, which currently provides over 400% APR (in FXS) on $800k of deposits.
• SAFE+ is a new product coming to Arbitrum, built by the SafeYield team, and is 100% backed by USDs, offering a high-yield, non-volatile instrument for Arbitrum investors.
• SPA Gauge Bribes passed $55,000, with PlutusDAO and SperaxDAO as the first protocols to bribe the SPA Gauge.
• Sperax’s non-bribe revenue surpassed $500,000.

In April, Sperax plans to update its revenue dashboard to feature bribes, launch a savings dashboard for USDs, and continue to focus on bribe-related developments.

Take action on SPA

Check out SPA price today and start trading your favorite currency pairs:

• Trade SPA/USDT
• Trade SPA/ETH