In today’s fast-paced and competitive world, staying ahead of the competition requires constant upgrading of our skills, knowledge and most especially what we have to offer. In the Sperax ecosystem, upgrades are not just about changing versions, they are about evolving perspectives, enhancing experiences, tightening security, improving scalability and listening when the community speaks.
Sperax aims to ride the waves of the fast rising tides of decentralized finance (DeFi) and become a big part of its future, that is why it strives to be the best. The journey of a thousand miles that began late 2019 has yielded yet another monumental step. The Sperax team published an article on substack on the 3rd of July 2023, announcing that there will be an upgrade to the Sperax ecosystem stablecoin; USDs and it will be called USDs 2.0. The article highlighted the major protocol improvements that will be effected in USDs 2.0, but in this article, you will be made to understand what the Sperax USD (USDs 2.0) is all about — its uses, advantages, how secure, transparent and decentralized it is, and also how easily you can acquire USDs for yourself.
As an individual seeking to benefit from the crypto markets without taking unnecessary risks, the Sperax USD (USDs 2.0) acts as a bridge for you to effortlessly grow your funds while storing value. This is because the Sperax USD is a decentralized stablecoin yield automation protocol. USDs is a stablecoin that is always either fully backed or over-collateralized by crypto assets and these crypto assets are only audited stablecoins which are currently USDC.e, USDC, Frax, DAI, USDT and LUSD; more tokens might be added to this list in the future.
We can also refer to USDs as a rebasing token due to the fact that it generates auto-yield natively. Auto-yield in this context is just another fancy name for FREE MONEY. Yes! Free money in the sense that you just have to acquire USDs tokens and hold in an EOA wallet to be eligible for up to 11% APY auto-yield that is distributed automatically approximately every seven days.
The auto-yield feature of the USDs is possible thanks to the strategic deployement of collaterals used to mint USDs, to other audited DeFi protocols to generate organic yield. 50% of the yield generated is shared to USDs holders through the Dripper smart contract as auto-yield. The remaining 50% of the yield is used for SPA buyback and burns. The percentage of the yield that goes to the USDs holders and SPA buyback process can be changed through governance, which basically means the community can vote to change the percentage allocation through governance.
Each proposal to effect a change in governance in the Sperax ecosystem is firstly discussed on the Sperax Forum and then proposed on the Sperax Snapshot page. The community members that have acquired veSPA tokens (the voting card) by staking SPA tokens can vote FOR or AGAINST any proposal.
On September 21st 2023, the Sperax Core Team created a proposal to diversify USDs collateral strategies and restructure USDs minting and redemption fees. The voting started on the 25th of September and when it ended on the 28th of September, the proposal had gotten a total of 660M veSPA voting in its favour and 35K veSPA voting against it. Upon ending the voting, the Sperax team created an improvement plan and it was implemented in the USDs 2.0.
Features of the USDs 2.0
The Sperax team kicked things off in the new year with USDs 2.0, as a step towards making the protocol more decentralized, transparent, secure and scalable. USDs is being driven towards full on-chain governance thereby making it more decentralized. Below is a detailed list of the features of the USDs 2.0:
1. Making redemptions more transparent:
With USDs 2.0, users now have the power to choose which collateral (stablecoin) they want to get when they redeem from any yield strategy, instead of just getting what the system decides. Strategies are a set of smart contracts that control the depositing and withdrawal of collaterals from various other DeFi protocols like Aave, Compound, Curve, etc. If there are any slippages when users redeem, they still have to deal with them, but now they can pick what to do about it. For example, if they redeem from strategies like Aave or Compound, they might have less of these slippages compared to more complicated liquidity pool strategies like Curve.
2. Decentralizing the process of harvesting and distributing Yield:
Within the Sperax ecosystem, the Harvest functions embedded in various strategies efficiently transfer the generated yield back to the primary USDs vault. From there, the yield is dispersed to USDs holders in the form of auto-yield. These functions will be accessible to the public, with an attractive pre-configured incentive set at 1% of the total net yield collected. Once the yield is harvested across different contracts, these tokens will be readily available for swapping into USDs tokens, eliminating any slippage concerns. The USDs collected in this process are then divided, with a portion allocated to revenue for veSPA holders and the rest distributed as auto-yield to USDs holders.
Furthermore, after the yield is converted into USDs, it will be released steadily, adhering to specific pre-set parameters. This ensures a fair distribution of auto-yield to all participants. We’re proud to introduce a protocol that prioritizes sustainability and transparency. Initially, the protocol will initiate auto-yield distribution once there’s sufficient yield to meet a minimum APR of 3% and a maximum APR of 10%, proportional to the amount of USDs token balance held.
3. Automating and decentralizing mint and redemption fees:
The protocol is designed to calculate the fees based on the proportion of each collateral. A function allows anyone to update the fee parameters, with fees being dependent on how much a collateral deviates from the target composition. Incentives are built into the system to encourage minting or redeeming a collateral by adjusting fees accordingly — lowering or raising them as needed.
The target composition for all collaterals, except for USDC, is set at 20%. The base fee is established at 0.05%. For instance, if the composition of a collateral like LUSD exceeds 20%, its mint fee will be higher than the base fee. To understand the specific logic behind fee adjustments, visit this detailed documentation provided.
Additionally, a view function within the contract enables users to easily check the current fee for any collateral. This ensures transparency and clarity in fee structures, empowering users to make informed decisions within the protocol.
4. Major security upgrades and code audits:
USDs has undergone significant transformations since its last audit as an algorithmic stablecoin. Previously, the lack of publicly verified contracts diminished transparency within the USDs ecosystem. However, this upgrade marks a pivotal shift towards enhancing both transparency and security.
To achieve this goal, Quantstamp has meticulously audited all contracts associated with USDs. The comprehensive audit report is now accessible to everyone, further increasing confidence in the protocol’s integrity. Additionally, we are committed to fostering transparency by verifying and publishing the contracts on Arbiscan for public scrutiny.
Our dedication to community collaboration is unwavering. Through these upgrades and the open-sourcing of our code base, USDs becomes more adaptable and inclusive. We invite the community to actively participate in shaping the future of USDs, ensuring that it remains a resilient and community-driven stablecoin.
5. The minting and redeeming process of USDs:
The minting process of USDs is directly tied to the price of the collateral token. When the price of the collateral token exceeds $1, USDs will use $1 as the price and mint 1 USDs for each collateral token provided. However, if the price falls below $1, a larger quantity of collateral tokens will be required to mint 1 USDs. In practical terms, minters will need to deposit collateral worth $1 to obtain 1 USDs. It’s important to note that USDs will only accept collateral tokens with prices not dipping below $0.97 cents to maintain stability.
On the other hand, the redeeming process for USDs is straightforward. Users can exchange 1 USDs for 1 collateral token of their choice, providing a seamless means of conversion.
How to acquire USDs 2.0
USDs 2.0 can be easily acquired through the following ways:
1. By minting on the app.sperax.io homepage.
The minting is a straightforward process which involves initially connecting your wallet holding the collaterals you wish to use to mint USDs. This is done by clicking the “Connect wallet” button:
Click on the icon of your wallet:
Click “Open” to open your wallet:
Confirm that it shows you “app.sperax.io" wants to connect with your wallet, then confirm the connection by clicking “Connect” in your wallet:
Now that the connection is done, we simply head back to the homepage and scroll down the page till you see the mint/redeem section:
Click on the USDC.e and change it (if there is need) to whatever eligible collateral (stablecoin) you wish to use to mint USDs:
After selecting the exact collateral, enter the amount of collateral you wish to use to mint USDs and then click mint. Approve the transaction in your wallet and you are good to go!
2. By buying USDs on a Decentralized Exchange (ParaSwap):
To get USDs from ParaSwap is as easy as getting any other cryptocurrency. It involves you connecting your wallet firstly to the ParaSwap. The link to the ParaSwap page where you can swap cryptocurrencies for USDs is anchored under the “Buy USDs” under the minting section on the app.sperax.io homepage.
Upon clicking “Buy USDs”, click “Connect Wallet” and select “WalletConnect”.
Click “Open” and then “Connect”.
With that, your wallet is connected to the ParaSwap exchange. Enter the amount of cryptocurrency you wish to swap for USDs and confirm. Approve the transaction in your wallet and you are good to go!
Conclusion
In summary, USDs 2.0 represents a significant leap forward in the Sperax decentralized finance. With its emphasis on transparency, security, and user empowerment, it offers a compelling solution for individuals seeking to engage with the crypto markets safely and efficiently. Through its innovative features and community-driven governance, USDs 2.0 paves the way for a more inclusive and adaptable financial landscape.
Read more about Sperax USD today at sperax.io and join the Sperax Team in building a great community by following our social:
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