In your exploration of the world of decentralized finance (DeFi), you’ve probably heard about the Sperax Ecosystem and it’s governance token, $SPA. But did you know that $SPA is only one of three tokens in the SPA family? The SPA, veSPA and xSPA tokens make up the SPA family and they all work together to make the Sperax ecosystem a success. In this article, we’ll take a deep dive into the SPA family and explain everything there is to know about the SPA family. But before we dive into the details, let’s start with the basics: What is the Sperax Ecosystem? What is $USDs? What role does it play in the SPA family and the Sperax Ecosystem?
The Sperax ecosystem consists of the Sperax USD protocol and the Demeter protocol. The ecosystem is powered by the SPA token, which serves as a governance and value accrual token. The Sperax ecosystem is governed by the Sperax DAO, which is a community of SPA stakers. The Demeter protocol is a no-code farm launcher on Uniswap V3 and Camelot. The Demeter protocol was launched in November 2022. The Sperax USD protocol is a decentralized finance (DeFi) protocol built on Arbitrum that mints Sperax USD - a stablecoin featuring 'auto-yield' generation.
Sperax USD is a stablecoin that is pegged to the US dollar. It is backed by on-chain collaterals which are also stablecoins. Sperax USD is unique because of its yield automating feature, through which $USDs holders can earn up to 11% APY automatically. This means that users can access the power of compound interest with no action necessary from the end user, they simply earn by holding $USDs in an EOA wallet. Sperax USD is also known as $USDs and it was launched in December 2021.
The Sperax USD is very important to the Sperax ecosystem and the SPA family simply because $SPA exists because of $USDs. The veSPA token exist because of the SPA token and similarly, the xSPA token exist because of the veSPA token. Therefore, it is essential to recognize that the SPA family existence is dependent on the presence of $USDs; for without $USDs, there can be no $SPA.
Now, let’s talk about the SPA family:
The SPA token ($SPA): $SPA is the value accrual token of the Sperax ecosystem. It is also the governance token of the ecosystem thanks to the staking protocol. In the staking protocol, SPA holders can stake SPA tokens on either Arbitrum or Ethereum and receive veSPA (a token derived from $SPA and gives voting right to SPA stakers).
The SPA token is very important in the Demeter protocol, where different farms are created. Farms having USDs or SPA as one of its cryptocurrency pair will recieve a particular amount of SPA emissions weekly from the SPA gauge based on the voting result. Users can also provide liquidity for Demeter farms and earn $SPA.
$SPA exists on the Arbitrum One network and there’s a wrapped version ($wSPA) on the Ethereum network. There’s also the plsSPA token which is just locked SPA that gives voting rights on proposals available on the snapshot (Snapshot is a voting platform that allows DAOs, DeFi protocols, or NFT communities to vote easily and without gas fees).
There is a total supply of 4.611 Billion SPA tokens but only 1.683 Billion is circulating. If you’re curious to learn more about SPA Tokenomics, click here to satisfy your curiosity. $SPA also has a buyback contract in which $SPA is bought on the open market using protocol fees and yield generated from $USDs, to help maintain constant buying pressure for $SPA.
The veSPA Token($veSPA): $veSPA is the non-transferable token received when a user stakes $SPA, therefore $veSPA holders can also be referred to as SPA stakers. The "ve" in veSPA stands for "vote escrow" which simply means veSPA tokens are basically SPA tokens locked in the "vote escrow" mechanism.
veSPA tokens give voting rights to $veSPA holders (users with higher $veSPA balance will have more voting power). SPA stakers therefore gain the ability to influence $USDs related decisions (e.g they can control parameters of USDs protocol, yield strategies, eligible collateral, new product features, new partnership, through the off-chain governance). They can also vote on the SPA Gauge to determine the amount of SPA emission a particular farm will recieve. The SPA Gauge was launched in February 2023.
SPA stakers do not only receive voting rights when they stake their $SPA, they also enjoy staking rewards($SPA) accrued on a weekly basis, and the amount of rewards received is determined by the user’s $veSPA balance. Users who lock $SPA for a longer period (and therefore receive more veSPA) will receive more rewards than users who lock the same amount of $SPA for a shorter period. These staking rewards include:
-25% of of the yield generated by Sperax USD protocol.
-100% of the Fee income from USDs mints and redemptions.
veSPA holders are the decision makers of the Sperax ecosystem and when the on-chain governance is launched, they will become the true owners of the Sperax ecosystem (because they control the decisions being made in the ecosystem).
Note: When you stake SPA, the amount of veSPA you receive won't remain constant; it will gradually decrease over time. This means your rewards per week and voting power will also diminish alongside your veSPA balance.
The xSPA Token: $xSPA is the reward token of the Sperax ecosystem.
The xSPA token was created so that the SPA emissions from the SPA Gauge can have a looping effect, such that a good portion of $SPA distributed would be invested back into the ecosystem in the form of $veSPA (when $xSPA is staked for $veSPA) and increase the burning rate of SPA (when xSPA is redeemed for SPA).
-When staking $xSPA for $veSPA, the minimum lockup period of $xSPA is 180 days. When one $xSPA is staked for 180 days or more, users already staked $SPA balance will increase by 1 $SPA.
To redeem $xSPA for $SPA, the $xSPA is deposited through the redemption contract. Users can redeem 1 $xSPA for 1 SPA if they lock the $xSPA in the redemption contract for 180 days, the maximum redemption period. If $SPA is locked in the redemption contract for the minimum redemption period of 15 days, 1 $xSPA will be 0.5 $SPA, and the redemption contract will burn off the differential SPA amount.
If the redemption period is ‘x’, where 'x' is a number in-between 15 and 180 days, the amount of $SPA a user gets is calculated by:
Note: A redemption request cannot be modified or canceled and any differential amount of SPA during xSPA redemption is burnt immediately by the redemption contract.
So that’s it guys, everything you need to know about the SPA family and more. I hope it was informative and you enjoyed reading it! Feel free to support the post by clapping! 👏
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